Practice Management

Window Opens to Comment on CFP Conduct Standards

CFP Board released a draft of proposed revisions to its Standards of Professional Conduct for a 60-day public comment period, running through August 21, 2017.

By John Manganaro editors@strategic-i.com | June 21, 2017
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The Certified Financial Professional (CFP) Board this week called for industry and public comments on proposed revisions to its formal standards of professional conduct, which set the ethical requirements for all CFP professionals working with individual and institutional investors.

As the certification and monitoring organization lays out, “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.” As such, the board promises a “deliberate and inclusive process” for reforming the key conduct standards.

Newly released, a draft of the proposed revisions directly acknowledges the fact that the Department of Labor (DOL) has recently taken the bold—if perhaps temporary—step of revamping its own adviser conduct standards under the Employee Retirement Income Security Act (ERISA). CFP Board officials freely admit their own efforts, like those at DOL, represents a significant revision and strengthening of the standards with “a range of important changes being implemented.” 

At a high level the changes broaden 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 [personalized] financial planning.”

CFP Board says it will carefully consider feedback received during the comment period—so now is the time for interested parties to speak up and speak clearly. “The final revised standards will be announced at a later date along with an effective date for implementation,” CFP Board says.

NEXT: Highlights of the stronger CFP standards