CFP Board to undergo review of standards

The last review resulted in the establishment of Rule 1.4, which imposes a fiduciary level of care when providing financial planning to clients

Dec 16, 2015 @ 7:00 am

By Greg Iacurci

The Certified Financial Planner Board of Standards, Inc. is conducting a review of its standards of professional conduct, and has formed a commission to perform the evaluation and recommend any changes it deems necessary, the organization announced Wednesday.

A 13-person commission, dubbed the CFP Board Commission on Standards, will review the standards in place for all those with a CFP certification, which include the code of ethics and professional responsibility, rules of conduct, financial planning practice standards and terminology.

The last review of CFP standards started in 2007 and changes were put into effect in 2009. One outcome of that review was the establishment of Rule 1.4, which imposes a fiduciary level of care when providing financial planning to clients.

“That was probably the single most important change [from that review],” said Kevin Keller, CFP Board's chief executive.

CFP Board leadership isn't initiating a standards review in response to a perceived problem, but because it's an appropriate time given the evolution of the financial services industry since the last evaluation, according to Richard Rojeck, chair of CFP Board's board of directors.

The 13 individuals who make up the commission represent a range of business models for those holding CFP certificates, Mr. Keller said. The commission is chaired by Raymond Ferrara, chief executive of ProVise Management Group and last year's CFP Board chair. The majority of commission members have held or currently hold positions within CFP Board.

Once commission members conduct a review, they'll deliver consensus recommendations to the board of directors, which will then finalize changes and publish them for a 60-day public comment period. Afterward, the board will assess comments and determine any potential changes.

Commissioners will tour nine major U.S. cities in the first quarter of 2016 to conduct town-hall type meetings, where they can receive input from the public on current CFP standards, as part of the review. The whole process is anticipated to take at least a year, Mr. Rojeck said.

CFP Board last month announced the launch of the Center for Financial Planning, meant to support workforce development among advisers and financial planners and foster research in the financial planning field.


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