Alan Goldfarb Expects CFP Board Sanction Next Week

Alan Goldfarb, the former chairman of the CFP Board of Standards, says he expects to receive a public sanction next week for violating its ethical standards.

Goldfarb resigned in November, along with two other members of the board's disciplinary and ethics commission, amid allegations that they may have violated provisions of the board’s standards of professional conduct.

Goldfarb says he has received a "public letter of admonition" for violating rules of the CFP Board’s Code of Ethics that pertain to disclosing compensation arrangements. But he denies that he mischaracterized his compensation as fee-only, as opposed to charging commissions.

“Nothing I did in the last five years had anything to do with selling on a commission basis,” he told Financial Planning.

CHANGE OF FIRMS

Goldfarb, a certified financial planner, was chairman of the CFP Board from January 2011 until his resignation last November.

At the time, he was director of wealth advisory services for Weaver Wealth Management in Dallas, which is owned by the accounting firm Weaver LLP. Subsidiaries of the firm include a broker-dealer and an insurance agency, which do charge clients commissions.

Goldfarb, who has since relaunched his own firm, Financial Strategies Group in Dallas, says the CFP Board contends that the potential “flow-through” of income from the other Weaver firms “taints” his income at the wealth management firm. He insists that that income had “nothing to do” with his financial planning activities and other work with clients, and that he was only compensated by fees and a salary.

“Everything was disclosed to clients and there was no misrepresentation,” Goldfarb says.

The CFP Board declined to respond to Goldfarb's comments. "CFP Board has a process for handling disciplinary process matters," the group said in a statement. "We are now following that process. If and when we have an announcement related to this matter, we will release the information to the public."

Goldfarb says he had thought the “worst case” scenario would be that the CFP Board would dismiss his case with caution, but that a public sanction, although the most lenient penalty given by the Board, was undeserved.

“I’ve worked in the business for 40 years with no blemish,” Goldfarb said. “Frankly this hurts my reputation when it is not deserved.”

Read More:

• Goldfarb: I Expect to Be Cleared
• Ex-CFP Board Chief Leaves for Own Firm