Continuing education requirements are a fact of life for most financial professionals. The vast majority of planners dutifully complete their courses, take their exams, and do a better job for their clients as a result. However, a few opt to game the system by recruiting others to take their tests on their behalf -- or to take tests for other people in their firms.
If this unethical and illegal practice has ever crossed your mind, banish the thought now. Playing fast and loose with CE can earn you a big fine or even a suspension from the business. Just ask the State Farm representatives who recently got caught by their company and ultimately punished by FINRA.
The case involved 16 representatives working for State Farm VP Management Corporation of Bloomington, IL. FINRA recently suspended them for misconduct involving its registered representative Continuing Education program. The representatives also received fines ranging from $5,000 to $10,000 and suspensions ranging from 30 days to six months.
What did they do wrong? Apparently, nine of the reps were supervisors who directed or allowed subordinates to take State Farm's "Firm Element" proficiency test for them. One was a supervisor who directed a subordinate to take the test for other representatives, and six of the sanctioned representatives completed the test for their superiors.
Perhaps the sanctioned representatives thought taking CE was beneath them or that the time spent studying for the test was better spent elsewhere, but their thinking led them astray, because now all 16 have serious blots on their records. Can avoiding CE possibly be worth the fines and loss of reputation they suffered?
So the next time you're put out by your CE requirements, weigh the positives of hitting the books against the negatives of playing CE games. Which makes more sense to you?
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