Billing yourself as “fee-only” is a decision your certificating body has every right to take issue with, according to a new ruling from one of North America’s most influential courts
In a highly publicized case where a husband and wife team got taken to task for promoting themselves as “ fee-only planners,” a U.S. court has upheld the right of the CFP Board to determine who can promote themselves using that name.
Judge Richard J. Leon of the U.S. District Court for the District of Columbia recently threw out the lawsuit that hinged on use of “fee-only” and its very definition.
The respected jurist sided with the CFP Board, which argued that the Camardas are fee-based but also commission-based advisors because they own an insurance agency that earns commissions. The Camardas countered that as CFP licensees they’ve been run roughshod over without any recourse to legal remedies.
“We disagree with the judge’s decision, and think it ominous for the emerging profession, and for the public it would serve,” said the Camardas in a letter addressing the ruling. “The court did not look at the case itself or the evidence. It merely ruled the CFP Board could do whatever it pleases.”
As for the CFP Board, it sees things much differently.
“This is a significant victory for CFP certification, for CFP Board and for CFP professionals,” said CFP Board Chairman Richard P. Rojeck. “It affirms the integrity of the CFP certification and CFP Board’s role as the standard-setting body for personal financial planners.”
Should financial planners be concerned about the latest series of events?
While it’s important that organizations such as the FPSC here in Canada and the CFP Board in the U.S. remain vigilant in their efforts to maintain the integrity of the CFP marks, the Camardas’ legal challenge suggests not all financial planners are happy with the power these groups bring to the table.
“In the same way that driving is a privilege and not a right, CFP certificants should now be on notice that, when they click through those terms and conditions, they hand a set of keys to their career over to the CFP Board,” said Brian Hamburger, CEO of MarketCounsel, about the judge's ruling. “If certificants don’t agree or understand with them [terms and conditions], their recourse is to give up their use of the CFP mark well before any inquiry or dispute ensues.”
Judge Richard J. Leon of the U.S. District Court for the District of Columbia recently threw out the lawsuit that hinged on use of “fee-only” and its very definition.
The respected jurist sided with the CFP Board, which argued that the Camardas are fee-based but also commission-based advisors because they own an insurance agency that earns commissions. The Camardas countered that as CFP licensees they’ve been run roughshod over without any recourse to legal remedies.
“We disagree with the judge’s decision, and think it ominous for the emerging profession, and for the public it would serve,” said the Camardas in a letter addressing the ruling. “The court did not look at the case itself or the evidence. It merely ruled the CFP Board could do whatever it pleases.”
As for the CFP Board, it sees things much differently.
“This is a significant victory for CFP certification, for CFP Board and for CFP professionals,” said CFP Board Chairman Richard P. Rojeck. “It affirms the integrity of the CFP certification and CFP Board’s role as the standard-setting body for personal financial planners.”
Should financial planners be concerned about the latest series of events?
While it’s important that organizations such as the FPSC here in Canada and the CFP Board in the U.S. remain vigilant in their efforts to maintain the integrity of the CFP marks, the Camardas’ legal challenge suggests not all financial planners are happy with the power these groups bring to the table.
“In the same way that driving is a privilege and not a right, CFP certificants should now be on notice that, when they click through those terms and conditions, they hand a set of keys to their career over to the CFP Board,” said Brian Hamburger, CEO of MarketCounsel, about the judge's ruling. “If certificants don’t agree or understand with them [terms and conditions], their recourse is to give up their use of the CFP mark well before any inquiry or dispute ensues.”
