It’s perhaps the ultimate irony when a financial advisor files for bankruptcy. But the CFP Board finds it is happening more and more often. Of 103 disciplinary hearings the board held last year, an estimated 25% of planners involved had filed for bankruptcy. In 2011, that number jumped to about a third.
“In my personal experience, the increase in bankruptcies really started last year,” said Michael Shaw, managing director of the CFP Board’s professional standards and legal departments. “My sense in reviewing decisions is that the downturn in the economy really shows itself in the bankruptcy area.”
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