Morgan Stanley and Merrill Lynch, the nation’s two largest wirehouses (by number of advisors), have told their advisors with CFPs to stop using the term fee-only.

The move came in response to the CFP Board’s surprise move on Sept. 19 to strip the fee-only listings from its website. The board removed the fee-only label from all the advisor profiles on its own website, then offered CFPs a blanket amnesty from punishment for breaking the board’s rules for use of fee-only term. The board’s rules prohibit advisors working in firms that take commission from calling themselves fee-only -- thus prohibiting any wirehouse advisors from use of the term.

Before issuing the amnesty, the board had already punished at least three of its former officials -- including former chairman Alan Goldfarb -- for compensation disclosure violations. Those sanctions occurred at a time when the board was not punishing advisors in wirehouses, insurance companies, independent broker-dealers and other firms who broke this rule on its site.


Morgan Stanley says it has sent out a bulletin to all of its 16,000 advisors, instructing those with CFPs to comply with the board’s rules for use of the term both on the board’s website and in any marketing of their practices. A company spokesman says Morgan reimburses all its advisors who decide to study and sit for the CFP examination.

Merrill Lynch, which has a total of 14,000 advisors, informed its 2,900 CFP advisors to switch their compensation disclosures to “commission and fee,” according to a company spokeswoman. Merrill integrated the CFP curriculum into its 43-month training program for new advisors about two years ago, but does not require those advisors to take the exam.

A representative for Wells Fargo Advisors says the wirehouse is still determining whether and how it plans to communicate with its advisors about this issue. Wells Fargo has approximately 3,000 CFPs among its advisors.

The CFP Board has expanded the number of its certificants to more than 68,000 currently from 52,000 in 2007. Much of that growth has come from advisors in large firms.

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