WASHINGTON – Florida financial planners Jeffrey and Kimberly
Camarda are scheduled to present oral arguments to the U.S. Court of Appeals
for the District of Columbia in September in a case filed against the Certified
Financial Planner Board of Standards Inc. (CFP Board) that could have serious
implications for the financial planning industry.
The appeal asks the court to schedule a public trial in the
Camardas’ legal battle against the CFP Board.
The Camardas, who are husband and wife, appealed a July 2015
ruling made by the U.S. District Court for the District of Columbia that
dismissed the Camardas’ breach-of-contract lawsuit filed against the CFP Board in
connection with a dispute over how they disclose their compensation.
“If the Camardas are ultimately victorious, it would be a
severe blow against the CFP Board’s ability to exert authority on CFP
certificants and (publicly) discipline them for misdeeds,” Michael Kitces, partner
and director of wealth management at Pinnacle Advisory Group Inc. and a
financial planner blogger and editor, told the Florida Record.
The Camardas filed the lawsuit that was dismissed on July 6,
2015, by U.S. District Judge Richard J. Leon after they were disciplined by the
CFP Board amid allegations that they improperly advertised their services as “fee-only.”
The CFP Board said one of the Camardas’ two firms, Camarda Financial Advisors, was
advertised as fee-only, even though Camarda Consultants was commonly owned by
the couple and did not perform services on a fee-only basis.
According to court documents, Camarda Financial Advisors is
offers fee-only investment advice, while Camarda Consultants is a “licensed insurance
agency and financial consulting firm providing business planning, tax, estate
planning, insurance and other noninvestment advisory services to its clients
for both fees and commissions.” The couple argued in court documents that
Camarda Financial Advisors and Camarda Consultants “were two separate and
distinct legally formed and organized entities under Florida law.”
“The Camardas allege that the CFP Board did not properly adhere
to its own processes and procedures and treated them unfairly,” Kitces said.
Meanwhile, Kitces said the CFP Board maintains that it acted
appropriately and that the courts should not have jurisdiction to intercede, “given
that CFP certificants ultimately sign an agreement with the CFP Board to adhere
to their standards.”
“Generally speaking, the ultimate issue at hand in the
Camarda case is the CFP Board’s authority to promulgate and then enforce its
own practice standards,” Kitces said.
In his ruling dismissing the case, Leon said: “In reviewing a
disciplinary action by a private organization, courts do not ‘second-guess’ the
organization's interpretation of its own rules or its evaluation of the
The CFP board said in a statement following the unsealing of
the July 2015 ruling that Leon noted in his decision that the CFP Board
“followed its own rules throughout the disciplinary proceedings” against the
Camardas and that the court found “no evidence that [CFP Board] was motivated
by bad faith or ill will” in disciplining the Camardas.
In addition to the breach-of-contract allegations, the
Camardas claimed the CFP Board unfairly competed against them and engaged in
false advertising by stating that it fairly enforces its disciplinary rules.