CFP Board chairman steps down amid ethics concerns

Fri Nov 2, 2012 4:37pm EDT

Nov 2 (Reuters) - The chairman of an organization that certifies and develops standards for financial planners has stepped down amid allegations that he may have violated the group's ethics rules.

Alan Goldfarb, chairman of the Certified Financial Planner Board of Standards Inc, resigned along with two members of a disciplinary and ethics committee, the organization said in a statement on Friday.

The three left after an investigation coordinated by a CFP Board special committee found "sufficient merit" that they may have violated the group's own standards, the CFP Board said. The preliminary findings "do not involve alleged violations of criminal or civil laws," wrote Kevin Keller, the CFP Board's chief executive, in a statement emailed to Reuters.

"The resignation was to maintain the integrity of the Board. I did not commit any violation," Goldfarb wrote in an email to Reuters.

Goldfarb's resignation marks the second incident in less than six month involving leaders of the financial planning profession. In August, Ron Rhoades, also a certified financial planner, said that he would not serve in his upcoming role as chairman of another group, the National Association of Personal Financial Advisors, because of a compliance mishap with Florida securities regulators.

Goldfarb is also a certified financial planner and director of wealth advisory services for Weaver Wealth Management in Dallas, Texas.

The CFP Board did not disclose which standards Goldfarb and the two ethics committee members, whom it did not identify, may have violated. Goldfarb said in the email that the alleged violations involve a flap over representing his business compensation as a "salary" instead of as "fees and commissions." He declined to provide further details because the CFP Board's review process is "confidential," he said.

Goldfarb is registered as both an investment adviser and securities broker.

In addition to his position at Weaver Wealth Management, he is a broker for Weaver Tidwell Capital, LLC, a brokerage registered with the Financial Industry Regulatory Authority.

Investment advisers typically charge a flat fee for their services based on a client's assets under management. Brokerages, however, charge commissions for their services.

Goldfarb said he expects to be "cleared of any wrongdoing" after the CFP Board completes the next round of a disciplinary process that he helped to develop. He notified the CFP Board of his resignation in a letter on Tuesday.

On Wednesday, the board elected Nancy Kistner, its 2012 chair-elect, to fill the remainder of Goldfarb's term. Kistner is a managing director at U.S. Trust, a private bank unit of Bank of America Corp. She will serve as the CFP Board's chairman through 2013.

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