Resources/ Updates

Jun21

Certified Financial Planner ~ Proposed Code of Ethics and Standards of Conduct

The Certified Financial Planner Board of Standards seeks feedback on its new, 17 page draft proposal entitled Code of Ethics and Standards of Conduct.  If approved, it would require Certified Financial Planner professionals (“CFP® pros”) to act as fiduciaries—put a client’s interest first—at all times.  It would also update the standards related specifically to financial planning.

Highlights of Proposed Changes

  • A broader fiduciary standard that requires CFP® professionals to act in the best interest of the client at all times:
    • The draft requires a CFP® pro to act in the best interest of the client when providing financial advice to a client.  Note, under the current Standards, CFP® pros are required to act as a fiduciary when providing financial planning.
  • A shorter definition of financial planning and a presumption that financial planning is required:
    • The draft defines financial planning 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 draft sets forth a presumption that CFP® pros are required to provide financial planning when providing financial advice.
  • More specific Practice Standards for the delivery of financial planning:
    • The draft updates the Practice Standards  with the financial planning process beginning after the engagement has been formed and with goals selected after the CFP® pro understands the client’s personal and financial circumstances.
  • A revised process for addressing bankruptcies:
    • The draft includes bankruptcies as a type of adverse conduct to be handled through the disciplinary process (returning CFP Board to the process in place before 2012).
    • The draft includes an easier-to-read document for both the public and CFP® profs.

 To Comment

The 60-day comment period ends Monday, August 21, 2017.

Related Resources

CFP Board Releases Draft Revised Code of Ethics and Standards of Conduct – June 20, 2017

Final Standards for Public Comment: Proposed Code of Ethics Standards of Conduct – June 20, 2017

CFP Board Video about the proposed Standards

About SDDco Group

Formed in 1952, the SDDco Group (www.sddco.com) delivers outsourced professional support to the financial services and technology sectors. Our menu of professional services includes accounting, regulatory and tax compliance, AML testing, brokerage hosting and supervision, as well as assuming designated FinOp, CCO, and CFO roles.  To connect with SDDCO:

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