The board of directors of the Certified Financial Planner Board of Standards Inc. is meeting in Maine this week, and may decide to delay enforcing an expanded fiduciary standard for financial advisers who hold the group's CFP mark.
Approved in 2018, the CFP Board's new code of ethics and standards of conduct requires all CFPs, including brokers, to act in the best interests of their clients when providing financial advice. The new standards are scheduled to take effect in October.
Meanwhile, the broader financial advice industry is trying to figure out how the CFP Board's new standards jibe with the Securities and Exchange Commission's recent investment advice reforms, under which brokers do not have to work under a fiduciary standard with clients.
The Financial Planning Association on Monday sent a letter to the CFP Board requesting the organization delay enforcement of its new code until June 30, 2020.
"While adherence to the new standards can be accomplished by many CFP professionals, there are others who will need additional time to educate themselves on the standards and make the necessary business adjustments to ensure full compliance," the letter stated. "We think it is critical that those CFP professionals and their firms who are genuinely committed to adhering to the new standards be given every opportunity and resource to comply."
Earlier this month, the American Securities Association, which represents regional financial services companies, asked the CFP Board to back down on enforcing the fiduciary duty associated with the credential if financial advisers are adhering to the SEC's new advice rule, Regulation Best Interest.
Meanwhile, large national broker-dealers are questioning whether their advisers will be allowed to continue to use the CFP designation as part of their pitch to clients, industry sources have recently noted.
When to put the new code of standards into place is on this week's agenda, noted CFP Board spokesman Daniel Drummond, in an email.
The CFP Board's directors this week are "discussing, among other things, the requests of FPA and other organizations to provide additional flexibility in the enforcement of the new Code and Standards, which remain effective October 1, 2019," he wrote.
This week's meeting of the board of directors is one of three the organization typically holds each year. Also, the CFP Board on Friday afternoon is planning to hold a business update webinar. The new code and standards have been discussed in prior webinars by the organization.