Market Regulation

CFA Applauds CFP Board’s Revised Code of Ethics and Standards of Conduct

New Standards Provide Strong Protections for Consumers Using CFP Professionals and Set Model for Financial Advice for All Advisors

Washington D.C. — The Certified Financial Planner Board of Standards, Inc. (“CFP Board”) recently adopted a revised Code of Ethics and Standards of Conduct that requires a CFP® professional to act as a fiduciary, and therefore, in the best interests of the client, at all times when providing financial advice. The Code and Standards will become effective on October 1, 2019.

“Investors often can’t easily tell whether the financial professional they are working with is providing advice that’s in the investor’s best interest or a mere sales pitch disguised as advice that’s in the financial professional’s interest,” said CFA Financial Services Counsel Micah Hauptman. “Particularly at this time, with regulatory protections under attack on all fronts and significant market and regulatory uncertainty about what protections investors will receive when they seek investment advice, a strong indicator that the financial professional will act ethically and provide advice that’s truly in the customer’s best interest is for the financial professional to practice under the CFP mark.”

“The CFP Board’s revised standards set a model for what advice standards should look like throughout the financial industry,” Hauptman continued. “While many true professionals have voiced their strong support for these revisions, some industry representatives, particularly in the broker-dealer and insurance industry, have made it clear they have no interest in meaningfully raising their ethical standards. In fact, some firms have threatened to decertify their professionals if faced with the prospect of having to comply with these higher standards. If firms follow through on their threats, investors will clearly see just whose side these firms are on and they will bear the consequences of their anti-investor, ethically compromised decisions.”

“I was honored to serve as a member of the Standards Commission that proposed this historic advance in professional standards and pleased that the CFP Board has approved our recommendation,” said CFA Director of Investor Protection Barbara Roper. “Even as investors’ regulatory protections have come under attack, the CFP Board resisted pressure from some in the industry to weaken or water down its fiduciary standard. While the Board carefully considered all the comments it received, in the end it held firm to its commitment to promote the public interest by ensuring that CFP professionals are always held to a fiduciary standard when providing financial advice to clients, regardless of their business model and regardless of the nature of that advice. Investors and CFP certificants alike will benefit from having the CFP mark serve as a clear indication of financial professionals who are committed to acting in the best interests of their clients at all times when providing financial advice.”

Contact: Micah Hauptman, 202-939-1004; Barbara Roper, 719-543-9468