Financial industry group asks CFP Board to back off if reps comply with Reg BI

CFP Board CEO Keller touts standard but indicates possible delay in its enforcement

Jul 2, 2019 @ 2:00 pm

By Mark Schoeff Jr.

A trade association representing regional financial services companies is asking the Certified Financial Planner Board of Standards Inc. to back down on enforcing the fiduciary duty associated with the credential if financial advisers are adhering to new Securities and Exchange Commission advice rules.

CFP Board Chief Executive Kevin Keller said the organization will not provide a safe harbor for its new, more expansive fiduciary standard, but it is considering allowing more time for CFPs and firms to adjust before it is enforced.

In a letter today to the CFP Board, the American Securities Association expressed concern that brokers who hold a CFP mark and comply with Regulation Best Interest — the new broker standard the SEC recently approved — could still run afoul of the heightened CFP fiduciary requirement that goes into effect in October.

"We urge the CFP Board to provide investment professionals, who hold the CFP designation, with public assurance that compliance with federal securities laws and regulations, like Regulation Best Interest, will not lead to a disciplinary action," ASA CEO Chris Iacovella wrote. "This outcome will remove the confusion, and potential for harm, that a duplicative private standard would cause for investors across the country."

Mr. Keller said compliance with Reg BI, as it's known, will not satisfy the CFP's fiduciary requirement.

"CFP standards are higher than the regulatory floor, and that's what makes CFP meaningful," Mr. Keller said in an interview. "That's what makes CFP valuable in the minds of clients and prospective clients of members of the American Securities Association."

The new CFP fiduciary standard goes into effective in October, but enforcement could be delayed, Mr. Keller said.

"We've been hearing from firms, their trade associations and membership associations of financial planners that they might like to have more time to be ready for enforcement," Mr. Keller said. "Our board will discuss that next week."

Under the new CFP rules, all CFP holders — including brokers — must act as fiduciaries when providing financial advice. The SEC will regulate brokers and investment advisers separately, with brokers being governed by Reg BI and advisers continuing to adhere to fiduciary duty.

The brokerage industry has criticized the CFP Board for months, arguing that Reg BI should trump the CFP requirement so that brokers don't have to comply with two rules.

There has been rumbling that some firms may tell their registered representatives to drop the CFP mark, even though it is one of the most sought-after credentials.

"We hope nobody would be forced to give up their certification, but our standards are our standards," Mr. Keller said. "We were out in front of the SEC on Reg BI. We've set an unambiguous standard for the public. We want to work with all our stakeholders to get it implemented because we think the public will be better off with the standard in place."


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