CFP Board Proposes Tougher Standards for Advisors

After a flurry of recent regulatory, legal and media scrutiny on financial advisors, the CFP Board of Directors is tightening its already tough standards.

The CFP Board announced on Tuesday proposed changes to its Code of Ethics and Standards of Conduct that implement a more stringent application of fiduciary best interest for all certification holders.

The proposal rewrites the CFP Board’s Code of Ethics, narrowing it from seven to six requirements for certification holders:

Act with honesty, integrity, competence and diligence

Act in the client’s best interest

Exercise due care

Avoid or disclose and manage conflicts of interest

Maintain the confidentiality and protect the privacy of client information

Act in a manner that reflects positively on the financial planning profession and CFP certification

The proposal also completely rewrites the CFP Board’s Standards of Conduct to further clarify its commitment to a fiduciary standard for advice. According to the new Standards, the first duty owed to clients by a CFP professional is the fiduciary duty, defined by loyalty, care and the duty to follow client instructions.

In addition to restating a CFP professional’s duty to act with integrity and to diligently provide sound, objective judgment, the Standards now also require competence.

from FA News http://www.fa-mag.com/news/cfp-board-proposes-tougher-standards-for-advisors-33315.html

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