Your Input Needed: Proposed Changes to CFP Board's Standards of Professional Conduct

  • Thursday, July 27, 2017
  • 8:00 AM - 10:00 AM
  • Hyatt Regency Scottsdale at Gainey Ranch

Certified Financial Planner Board of Standards, Inc.


 

 


The CFP Board released for public comment proposed revisions to its Standards of Professional Conduct, which set forth the ethical standards for CFP® professionals.


We ask you to thoroughly review the proposed revisions and provide your feedback to CFP Board.


CFP Board's standards for ethics and practice are an essential part of the CFP® certification and an important element of the public's trust and confidence in CFP® professionals. Through a deliberate and inclusive process, CFP Board has developed a draft of proposed revisions to the Standards that is intended to enhance the integrity and value of CFP® professionals to the clients and communities you serve.


The draft proposal, titled Code of Ethics and Standards of Conduct, is a significant revision to the Standards with a range of important changes, including broadening the application of the fiduciary standard for CFP® professionals – effectively requiring CFP® professionals to put a client's interest first at all times – and enhancing and updating standards related to financial planning.


The full text of the proposed Code and Standards, an annotated version of the document, a short video about the changes, and additional information about the proposal are available on CFP Board's website at www.CFP.net/proposed-standards.


We want your feedback on the proposed Code and Standards and encourage you to make time for a careful and thoughtful review of the proposal and to submit your comments to CFP Board during the comment period. The 60-day comment period begins Tuesday, June 20, 2017 and ends Monday, August 21, 2017. Comments may be submitted by email to comments@cfpboard.org or through the online form accessible at www.CFP.net/proposed-standards.


We also invite you to our public forums to review and discuss the proposed revised Standards. Public forums are scheduled in the eight cities listed below between July 24 and 27. Complimentary registration is available at www.CFP.net/proposed-standards.

July 24

8:00 - 10:00 a.m.

Tampa

Tampa Marriott Waterside

July 24

4:30 - 6:30 p.m.

Atlanta

Westin Buckhead

July 25

8:00 - 10:00 a.m.

New York

Westin New York Grand Central

July 25

4:30 - 6:30 p.m.

Detroit

Sheraton

July 26

8:00 - 10:00 a.m.

St. Louis

Sheraton Clayton Plaza Hotel

July 26

5:00 -7:00 p.m.

Dallas

The Westin Galleria

July 27

8:00 - 10:00 a.m.

Phoenix

Hyatt Regency Scottsdale at Gainey Ranch

July 27

5:00 -7:00 p.m.

San Diego

Marriott Marquis San Diego Marina


CFP Board's Board of Directors will consider the feedback received during the comment period. The final revised Standards will be announced at a later date along with an effective date for implementation.


Background

In order for individuals to receive CFP® certification from CFP Board, they must agree to the high standards for competency and ethics that are set forth in the Standards. CFP Board periodically reviews the Standards to maintain the value, integrity and relevance of the CFP® certification. The current version of the Standards has been effective since January 2009.


CFP Board announced the formation of a Commission on Standards in December 2015 for the purpose of reviewing and recommending to the Board of Directors proposed changes to the Terminology, Code of Ethics and Professional Responsibility, Rules of Conduct, and Financial Planning Practice Standards sections of the Standards. After receiving feedback during a series of public forums and holding discussions with interested organizations and individuals, the Commission developed recommendations that are incorporated in the proposed revised Standards, which the Board of Directors has approved for public comment. The revisions strengthen the Standards, for the benefit of the public.

Highlights of Proposed Changes

  • A broader fiduciary standard requires CFP® professionals to act in the best interest of the client at all times
    • Extends a CFP® professional's obligation to act as a fiduciary, and therefore, in the best interest of the client, when providing financial advice to a client. Under the current Standards, CFP® professionals are required to act as a fiduciary when providing financial planning.
    • Since the definition of financial advice is broader than the definition of financial planning, the draft revised Standards expands the commitment that all CFP® professionals make to acting in their client's best interest.
                          
  • A shorter definition of financial planning and a presumption that financial planning is required
    • Presents a new definition of financial planning that is intended to be brief and comprehensive. Financial planning is defined as "a collaborative process that helps maximize a client's potential for meeting life goals through financial advice that integrates relevant elements of the client's personal and financial circumstances."
    • The revised Standards sets forth a presumption that CFP® professionals are required to provide financial planning when providing financial advice, while also outlining the factors CFP Board will weigh in determining whether financial planning is required.
       
  • More specific Practice Standards for the delivery of financial planning
    • Updates the Practice Standards, presenting them efficiently, with the financial planning process beginning after the engagement has been formed and with goals selected after the CFP® professional has developed an understanding of the client's personal and financial circumstances.
       
  • Revised process for addressing bankruptcies
    • Includes bankruptcies among the types of adverse conduct to be handled through the disciplinary process, thereby returning CFP Board to the process that was in place prior to 2012.
       
  • A consolidated, easier-to-read document for the public and CFP® professionals
    • Consolidates four sections of the current Standards in a single document. Following a brief Preamble, the Code of Ethics announces ethical principles, the Standards of Conduct sets forth specific standards governing the conduct of CFP® professionals, and a Glossary defines key terms.
    • The Standards of Conduct is organized into five discrete sections, one of which sets forth the Practice Standards for the financial planning process.

 




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