Conversations with 20 of the nearly 500 wirehouse advisors who had inaccurately been calling themselves fee-only on the CFP Board website failed to turn up any who informed clients of the change in their compensation disclosure.
“I’m not going to tell anyone that I changed my disclosure,” says
“My clients don’t really care about that,” adds
Both were among the roughly 8,000 advisors affected in September when the board abruptly and unilaterally removed all fee-only compensation disclosures from advisor profiles on its website.
The board’s rules forbid advisors in commission-taking firms such as wirehouses, independent broker-dealers and insurance companies to advertise themselves as fee-only. However, the board had been allowing hundreds of advisors from those firms, including nearly 500 at wirehouses, to use the term on its site while it was sanctioning other advisors for the same or similar misrepresentations.
The discrepancy has led some to charge the board with pursuing a selective disciplinary policy against CFPs, especially while it has rapidly grown its membership ranks and operating budget in recent years by adding CFPs from large firms. Two independent planners in
After the CFP Board altered the profiles in September, it instructed those 8,000 planners to rethink their compensation disclosure choices before selecting one of three options: fee-only, commission and fee, and commission-only. Later on, however, it quietly removed fee-only as an option for all wirehouse advisors — without informing either the public or CFP holders.
“We took this step for the benefit of the public — to help make sure that our Find a CFP Professional search tool contains accurate information,” board spokesman
In the course of being interviewed for this story, two wirehouse advisors learned that they could no longer choose the term for their profiles.
“It’s gone. It’s not an option any more,” one wirehouse advisor on the
“Now they’ve also added … a little link that you can click on,” she says as reads aloud some of the explanation visible on that link. “ ‘Misrepresentation of your compensation structure is a violation. Please review the following explanations carefully.’ … I think they should have done this from the beginning before they sanctioned anybody,” she says. “Unless you are going to sanction everybody, you shouldn’t sanction anybody,” she adds. “You can’t say it’s black and white, and sanction on gray.”
Asked about the board’s decision to alter their profiles and its choice to not punish them for violations, many wirehouse advisors who were contacted say the matter wasn’t a high priority for them.
“I’m absolutely oblivious to what’s even on my profile,” says
“I just got an email or something [about the altered profile] and I didn’t really consider it worthy of any effort,” said
“If I would have been punished by the CFP board for checking fee-only when 90% of my business is fee-based, I would have been really upset, obviously,” Matson says. “I would have felt that that would have been an unfair punishment, because the check box is on their website and it’s not like I’m being deceitful.”
“I understand where they are coming from,” he says. “People got into trouble and I didn’t get into trouble.”
|Copyright:||(c) 2014 Financial Planning. All rights Reserved.|
|Source:||Source Media, Inc.|