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The Institute for the Fiduciary Standard

A resource site for investors, brokers, academics and the media.


Building a fiduciary culture of honesty, integrity, and expertise.

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  • Jack Bogle

Looking for a Financial Planner? The Go-To Website Often Omits Red Flags

By Knut Rostad on August 1, 2019

Originally posted on the Wall Street Journal by Jason Zweig.

Many people seeking a financial adviser begin their search at LetsMakeAPlan.org, a directory operated by the Certified Financial Planner Board of Standards Inc.

The Board, which controls the CFP label coveted by financial planners, boasts of its high standards and has touted its directory of professionals as a place where people can find a screened, skilled and trustworthy financial planner.

What they won’t find there is any indication that thousands of the planners bearing the board’s seal of approval have had customer complaints or faced criminal or regulatory problems—often directly related to their work with clients. More than 60 have filed for bankruptcy within the past decade although the website says they haven’t disclosed such an event in the last 10 years.

The LetsMakeAPlan.org site has been presenting more than 6,300 planners without showing such problems even though the planners have disclosed them to the Financial Industry Regulatory Authority, according to a Wall Street Journal analysis of more than 72,000 profiles on the website.

The Journal compared data on the LetsMakeAPlan.org site against records kept by Finra, an industry-funded watchdog with legal authority to regulate brokers.

Among the planners the Journal’s analysis flagged, more than 5,000 have faced formal complaints from their clients over investment recommendations or sales practices, and hundreds have been disciplined by financial regulators or left brokerage firms amid allegations of misconduct. At least 140 faced or currently face felony charges, including one who pleaded no contest to a charge of possessing child pornography.

Read the rest at the Wall Street Journal.

Dan Moisand

 

Dan Moisand is a nationally recognized fiduciary fee-only financial planner, an Institute Real Fiduciary™ Advisor and Chair-elect of the CFP Board.

The Institute has enshrined the ‘Moisand Rule’ on fiduciary practices. It is basic and is more important today than ever: “You have to avoid conflicts. If I avoid a conflict, I don’t worry about it.”

Watch the video of Moisand speaking here.

Bob Veres

 

Bob Veres is a long term observer of financial planning. His Newsletter, “Inside information” Is a staple of leading planners. In the May edition he writes about fiduciary and the Institute.

"But a much bigger point is that the fiduciary standard—as Knut Rostad of the Institute for the Fiduciary Standard has pointed out—has been determined by the Supreme Court (1963 ruling) to be at the very heart of the Investment Advisers Act of 1940. It is the foundation of what it means to be an RIA registered with the SEC instead of a tipster or a tout."

- Bob Veres, Parting Thoughts ... The SEC's Own Compliance Culture

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