The Certified Financial Planner Board of Standards Inc. approved a new code of ethics and standards of conduct in 2018. Enforcement of their “expanded fiduciary standard” for financial advisers and brokers holding the CFP® mark has been pushed back until June 30, 2020.
The delay will allow the CFP Board to roll-out their new Code of Ethics and Standards at the same time as the Securities and Exchange Commission’s recent Regulation Best Interest (Reg BI). Both upcoming changes are intended to bring the current broker standard of suitability more inline with the fiduciary standard required of financial advisers.
The CFP Board’s new code requires all CFP holder’s (including brokers) to act in the best interest of their clients. While the enforcement of this new standard has been pushed-back it will become effective on October 1st of this year. Current standards of professional conduct will be enforced from October 1st, 2019 through June 29, 2020.
Some feel that the SEC’s Reg BI does not require a full fiduciary level of service but only requires brokers to document why they felt at the time of a recommendation/transaction why it was in the best interest of their client(s). This leaves holders of 2 types of registrations with 3 different levels of service: a fiduciary level for financial advisers, a best interest level for brokers and a fiduciary level for brokers who are also CFP® holders.
As you might imagine, eight major brokerage firms have called on the CFP Board to delay its changes until they can review how the SEC’s Reg BI would function with the CFP’s new expanded fiduciary standard. Other concerns expressed with the CFP® standard by these firms is that the standard duplicates existing regulations and is overly broad.
About Red Oak Compliance Solutions
Red Oak Compliance Solutions is a leading provider of intelligent compliance software, offering a range of AI-powered solutions designed to help firms of all sizes successfully navigate the increasingly complex regulatory landscape. Our suite of 17(a)-4/WORM compliant features offer risk minimization, cost reduction, and process optimization capabilities with features that are designed to evolve with our client’s needs. Our flagship advertising review software enables firms to deliver compliant content to the market with confidence, faster. Our Disclosure Management and Intelligence solution simplifies the management of disclosures, while our Registration Management solution automates and streamlines the licensing and registration process, further enhancing your internal processes.