Planners Unhappy Over CFP Board's Bankruptcy List

Register now

The CFP Board's release of the names of nearly 50 certified financial planners who have declared bankruptcy within the last five years is not sitting well with the planners.

"There's a lot of nuance that's not reflected in simply listing personal bankruptcy," says Mark Witaschek, senior vice president of McLean Asset Management in McLean, Va., and one of the planners cited in the board's most recent bankruptcy list.

Witaschek filed for Chapter 11 in January 2013 after a protracted financial dispute with former business partners. He subsequently filed a petition with the CFP Board, asking the Board to make a distinction between his efforts to work out a payment schedule with his creditors via Chapter 11 versus simply "walking away" from his debts in a Chapter 7 filing.

The CFP Board did not respond to his petition, according to Witaschek, and  declined to comment on the case for this story. What's more, Witaschek and other planners on the CFP Board's list say they are concerned the public disclosure will have a negative impact on their business.


"There are people who are going to Google my name and won't get past that point," Witaschek says. A Florida planner who was also on the personal bankruptcy list says, "If I was a client [and knew about the bankruptcy filing], I'd be asking that question each and every time."

The CFP Board’s current bankruptcy disclosure procedure became effective July 2012. The new procedure changed the way the Board addresses cases involving planners who filed for bankruptcy within the previous five years but are not under investigation by CFP Board for any other conduct; the CFP Board releases the names four times a year. (The most recent list is available here.)

"Under the new procedure, CFP Board no longer investigates, and the Disciplinary and Ethics Commission no longer adjudicates, bankruptcy-only cases," Michael Shaw, the CFP Board’s managing director of professional standards and legal, said in a statement. "Rather, CFP Board verifies the bankruptcy filing by checking publicly available court records, and gives the CFP professional an opportunity to challenge the court records.  In addition to announcing a bankruptcy-only case one time in a press release, CFP Board also disclosures the bankruptcy in a CFP professional’s public profile for 10 years from the date CFP Board is notified of the bankruptcy."


Shaw defended the disclosure policy, maintaining it "benefit[s] the public by: 1) making consumers aware of any CFP professional who has filed a bankruptcy within the previous five years; and 2) enhancing CFP Board’s consumer protection efforts by focusing more of CFP Board’s resources on allegations involving client harm."

The CFP Board's bankruptcy disclosure procedure is also "consistent with a CFP professional’s obligation under the Rules of Conduct to disclose a bankruptcy filing to a client or prospective client," Shaw added.  Rule 2.2(c), he noted, says that a planner "must disclose to a client or prospective client any information about the CFP professional that could reasonably be expected to materially affect the client or prospective client’s decision to engage" the planner.

Other groups have come under fire for failing to disclose such information. Just last month, The Public Investors Arbitration Bar Association, an advocacy group for investors, asserted that FINRA's BrokerCheck reports were missing key "red flag" information, including personal bankruptcy filings.

CFP Board’s bankruptcy disclosure procedure, Shaw said, "operates independently of any process that FINRA has in place."

Bankruptcy information on planners and certification status with the CFP Board can be found on

Read more:


For reprint and licensing requests for this article, click here.
Practice management Compliance Law and regulation Financial planning