CFP Board Names 19 CFPs With Bankruptcies

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Why are financial planners, of all people,  declaring bankruptcy? Hospital bills, the real estate downturn and the related financial crisis drove the bankruptcies of some of the 19 planners who appear on the CFP Board's most recent list of CFPs who've filed for relief for protection from creditors.

None are subject to disciplinary procedures under the board's policy -- which dates back to July 1, 2012 -- of publishing those CFPs' bankruptcies on their profiles on the board's website for a period of 10 years.

"I don't know that there's any concise way to say this except that I was in the epicenter of the banking and real estate meltdown in South Florida. The company that I was with downsized and I relocated out of state," says planner Alan W. Van Cleef, of Chattanooga, Tenn., recounting a series of events familiar to many Americans impacted by the recession.

"Two years later the house had lost 50% of its value. The mortgage company wouldn't refinance. I was forced to take a short sale. I have a handicapped child with lots of hospital stays, and the rest is history."

Van Cleef says he decided to share his story in the hopes it would help others facing a similar predicament.


Darren Grossman, a planner in Bala Cynwyd, Pa., who asked that his firm not be named, says he bought a home a decade ago, when he was 22, and took on two married friends as roommates, while helping them raise their five young children for a period of six years. After both parents lost their jobs, they stopped paying rent.

"I didn't want to kick them out," Grossman says. "I kept spending money on credit cards trying to keep the house afloat."

After the value of the house dropped significantly below the amount he owed -- and after he met his fiancée -- Grossman says he decided to file for bankruptcy.

"If I kicked the kids out, I wouldn't have been able to live with myself," he says, adding that he still sees the family a couple of times a year. "I don't think it's anything to be ashamed of if the worst thing you did in life is lose money trying to help someone."

Real estate problems were  also at the heart of bankruptcy filings from Christopher Blancett and Jorge Gonzalez, the two say.

A drop in value of his family home in Florida, along with two deaths in the family, drove Blancett, of Valic Financial Advisors in Indianapolis, to file for bankruptcy, he says.


For Gonzalez, of Pembroke Pines, Fla., buying a commercial property for his expanding business turned into "the kiss of death," he says. After the value of the property dropped more than 60% between 2002 and the real estate downturn six years later, Gonzalez says he and his partner twice tried to convince Wells Fargo to do a short sale. Instead, he says, the bank foreclosed on the property, selling it for $10,000 more than the short sale that Gonzalez and his partner proposed a year earlier. Then the bank sued Gonzalez and his partner, he says.

The bank "knew they would not have any real liability at the end of the day because of the fact that the government would make them whole on any losses," Gonzalez says he believes. "There was no other way for me to resolve the situation [with] an uncooperative lender."

Planner Chris Bales, now a Morgan Stanley advisor in Chattanooga, Tenn., says the recession drove the carpet mat company he ran for 20 years into the ground -- and gave him new perspective on the risks his entrepreneurial clients in his new planning practice face.

"Frankly, you can look at it as an asset," Bales says of his bankruptcy. "I know what it means to earn a lot of money and lose it. A lot of people in the industry don't have a clue."


Several of the planners said they are dismayed by the board's policy of keeping their bankruptcies on the board's website for a decade from the date the planner discloses the bankruptcy to the board -- three years longer than the filings appear on credit reports.

"That's really punitive," Bales says.

The board's list "rubs salt in the wound," Blancett adds.  

Two planners on the CFP's list who declined to comment are Mark Richard Lohrman (who filed for bankruptcy in Phoenix) and Billy Funderburk (filed in Denver).  

Other planners on the bankruptcy list who did not return calls are: Jason Atwater (filed in New Haven, Conn.), Reid Allen (Sacramento, Calif.), Eileen Egan (Newark, N.J.), Joseph Ellison (Los Angeles), Jeri Margolis Glazer (Greenbelt, Md.), Eric Berndt (Denver), Daniel Charles Cummins (Dallas), David Garner (Gainesville, Ga.), Scott Housel (Orlando, Fla.), Lars Lambrecht (Boston), Irene Maxwell (Oakland, Calif.), and Michelle Lee Wagner (Phoenix).

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