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CFP Board's 'Private Standards' Raise Concerns

In a letter Tuesday, the American Securities Association accused the CFP Board of subverting the SEC's authority.

In a letter Tuesday, the American Securities Association accused the CFP Board of subverting the authority of the Securities and Exchange Commission by holding certification designees to a standard of service beyond what is required by law.

Following a June vote by SEC commissioners to finalize a rule package that included a best-interest standard of conduct for broker/dealers, the CFP Board put out a statement reminding stakeholders that financial advisors who hold its certification are obligated to act as fiduciaries. Holders of the designation "will not be in violation of Regulation BI, or any other existing laws and regulations, by doing so. The new Code and Standards complement, rather than conflict, with the law," the organization said.

The CFP Board's "private standards"—as the ASA refers to the CFP Board's standards in the letter—undermine the authority of the SEC and are detrimental to advisors and investors, according to the ASA, which is a trade association that represents regional wealth management businesses, including LPL Financial, Raymond James Financial and others.

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

Iacovella also "welcomed the opportunity" to work with the CFP Board.

“We certainly appreciate the additional input. However, our standards are our standards. They will be effective October 1, 2019 as approved by the Board in March 2018," CFP Board CEO Kevin Keller told in a statement. Keller also said that prior to the ASA's letter, the organization was already engaging in conversations directly with wealth management firms, other trade associations and CFP designation holders.

Some large brokerages threatened to abandon their support of the designation in 2018, when the CFP Board approved its new Code of Ethics and Standards of Conduct mandating the fiduciary duty.


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