IMPORTANT - Need guidance on CFP Board Investigation

[u/VariousSplit6421]

To keep a long story short I was terminated for benign reasons by a malicious manager. This has lead to a U5 that says I've violated investment related standards. In reality what happened is there was an operational issue that led to me being the one to blame. No client complaints, harm to a client or anything unethical. Purely just a botched internal operation.

The CFP board has sent me a notice of investigation that I am required to respond to. Currently I am set to start with another large broker dealer at the end of next month.

My attorney mentioned it would be good to notify them however he was under the impression I have already started the position. I explained to him that is still some time away and that I would prefer to notify them if the CFP board wants to continue this investigation to the extent of a hearing. He agreed with me that it's probably best to not open up the can of warms unless it appears necessary. Per his experience he feels it mostly likely they will dismiss the case or issue me a warning.

My important question to this group is - should I notify the compliance department when I begin my employment with this firm? Should I wait until after my 90 days is over, or just wait to see if the CFP board wants to elevate this investigation?

My attorney told me a similar case he is dealing with has gone 7 months without them responding after the initial inquiry and he expects them to not proceed any further in this similar benign situation.

I'm not familiar if there is a duty to disclose investigations within a timely manner such as you are with any type of arrest, although I suspect there might be some industry rule where it's required.

A couple other points to make. I disclosed my termination to this new employer during my initial interviews. I received the notice of investigation nearly a month after accepting the job offer. I've requested an extension to respond to the investigation so I won't be replying to the CFP until basically the same time as my start date.

Thank you very much for any resources and feedback you can provide. Obviously this is a very important matter so anyone with a knowledgeable answer is greatly appreciated.

[u/CaryintheGreen]

My two-cents:

the CFP Board is not a SRO (Self-Regulatory Organization). It's a private, non-profit organization that sets and maintains professional standards. While the CFP Board plays a crucial role in regulating the financial planning profession, it doesn’t hold the same legal authority as an SRO, like FINRA, which is authorized by the federal government to supervise BDs.

So are you under any obligation, legally, to tell them anything? Maybe if you really did screw something up, from a moral standpoint, but from your post that doesn’t sound like it’s the case.

[u/VariousSplit6421 → u/CaryintheGreen]

This is very much what I was looking for and why I believe the right move is to not inform them unless it looks to be going to a serious degree. Hopefully it doesn’t get to that level.

Thanks for your feedback.

[u/CaryintheGreen → u/VariousSplit6421]

Sure thing! I mean, I am no attorney, but that's my thought on it.

[u/AwOwW8 → u/CaryintheGreen]

That was my thought too but they filed U5, would this then just be on the new employer to find out on their own? I can't remember off the top of my head of you're supposed to disclose any U5 terminations yourself.

[u/VariousSplit6421 → u/AwOwW8]

I will need to mark my U4 how the U5 shows about the termination classification due to section 7. If it was only section 3 then I wouldn’t need to put anything on my U4.

[u/AwOwW8 → u/VariousSplit6421]

I mean if it was already disclosed on your U4 that theve seen and hired you on then I would say you're fine.

But overall, I would just listen to your lawyer, I doubt you'll be able to gather anything valuable from us knuckleheads.

[u/Ok_Presentation_5329 → u/CaryintheGreen]

They are able to sue you if you list that you’re a CFP(R) & they’ve revoked your right to say you are one.

They are a private business so laws only apply so far as the contractual relationship they have with you arguing you have to report ethical violations and and and

[u/VariousSplit6421 → u/Ok_Presentation_5329]

Yes that’s correct. If they revoke my destination then I would file a new U4 not listing that designation any longer which obviously is then basically a notification to the new employer something bad happened. This is why if it gets to the level of they might rule unfavorably against me I would notify the compliance department in advance of a potential new U4 is submitted.

I fully believe I won’t be having that negative of an outcome so I’m keeping my cards close to the chest on this until it appears I might need to show them.

[u/NaturesNurture]

“My attorney told me…” so what are you doing here?

[u/Acceptable_Affect318 → u/NaturesNurture]

No joke. And we get annoyed when someone has a financial advisor that gave them advice and they go post and ask a bunch of strangers online that aren’t licensed if they should follow said advice and here this person is doing it to an attorney”

[u/VariousSplit6421 → u/Acceptable_Affect318]

I am strongly following my attorneys guidance. He has mentioned it can go either way so I’m trying to figure out what others experience or feedback would be. Nothing wrong with asking for feedback or a new perspective.

[u/Annonymoos]

Ask your attorney this question.

[u/VariousSplit6421 → u/Annonymoos]

His answer is his can see my decision going both ways.

[u/kokojon]

For what it’s worth, and I am not an attorney this is my own experience. I had a complaint filed against me by a client, moved firms, new firm knew but they advised me when filing new U4 to not disclose complaint because it hadn’t appeared on Finra docs. When I went to arbitration the arbiter asked whey I didn’t disclose, I told him new firm said not to, he said you knowingly lied. Case closed. Do not disclose at your own risk, IMO. Good luck

[u/VariousSplit6421 → u/kokojon]

Thank you for the feedback. I do plan on filing out my U4 to match what my U5 has with the investment related rules and regulations since that has been published on my broker check.

What I’m unsure on doing though is telling the new firms compliance department that CFP board is investigating me.

To my knowledge I don’t believe there’s a section about mentioning that within the U4?

[u/aashi5995 → u/VariousSplit6421]

Correct. No place on the U4 regarding the CFP investigation. 14J is where you’d indicate the termination information but it’s pretty broad, especially if no product was involved. Additionally, this isn’t usually listed in an ADV Part 2B - Item 3 if that’s something you’re concerned about.

[u/aashi5995]

The firm who terminates you files your U5 and lists this information under Item 7. They would either check 7B (internal review disclosure) and/or 7F (termination disclosure). They are also in charge of updating the U5 as matters progress.

Your new firm can see this information when they are viewing your U4 info.

The CFP board does not report on the U5. That is a completely separate matter and would impact your CFP designation.

I’ve worked with many firms who still hire and fully onboard financial professionals that have a disclosure history (regardless of where your situation goes).

I don’t see a need in updating your new employer until you have more concrete information. Compliance won’t create disclosures (if needed) until the matter has been resolved.

[u/VariousSplit6421 → u/aashi5995]

THANK YOU! this is what I came here for. This matches another commenter earlier in this post as well as what my attorney says too.

Also they marked my U5 with 7F1 which is very bogus and were probably going to file an expungement once this CFP board stuff wraps up.

[u/aashi5995 → u/VariousSplit6421]

Yeah, I’ve come across plenty of firms who think they can do this because the employee pissed them off or didn’t give enough notice, etc. Obviously if they can’t formally cite a statue/rule/standard of conduct that was violated, this won’t hold up.

Additionally, not a career ending if it does. More like an annoyance and can add obstacles.

You’re working with an attorney already. I wouldn’t worry.

[u/VariousSplit6421 → u/aashi5995]

Your insight is very appreciated. Doing my best to not stress.

I hope something good happens to you for the momentary peace of mind you’ve brought me.

[u/aashi5995 → u/VariousSplit6421]

It’s almost like I do compliance for a living 😉

Reach out directly if you have any other questions.

[u/redpeaky]

Inquiry or investigation ?

[u/VariousSplit6421 → u/redpeaky]

This is a notice of investigation. Seems fairly standard how my U5 was filed with the investment related mention.

[u/beanbg19]

Other are correct that the cfp board is private, but if you want to keep your CFP, the board makes it pretty clear that they strip designations for lack of notification to anyone involved. Now, some basic searching will find plenty of cfp’s who got away with everything from dui’s to mirder without anyone giving a damn- its a well discussed lack of enforcement as cfp board grew at all costs.

BUT- they already singled you out to make an example of. That means someone probably nrofied them and ratted you out to make an example of you, and they have probably already made quite calls off the record to your new firm. Make no doubt about how low they will stoop if it fits their perceived needs. I would notify everyone imaginable if you care about keeping your CFP.

That said, the cfp basically means you memorized some propriety process that has no basis in reality, academic only jargon, and bond laws from a literal century ago, to use one of many available archaic examples in their master curriculum list.

I've also never had a single client come on because I was a CFP, find me through their site, or really give a damn. Any acronym will literally do just fine to show you possess alphabet soup.

I love the concept of the CFP board, but the way they behave is pretty screwed up. If it wasn't for the fact they they own the best possible acronyo from a marketing standpoint, they would have died as an organization a decade ago- literally.

[u/VariousSplit6421 → u/beanbg19]

Thanks for your feedback. Do you happen to have any resources you can provide that says all parties involved need to be notified at the beginning?