The Financial Planning Association has penned a letter asking the Certified Financial Planner Board of Standards, issuers of the most widely recognized professional designation in the financial planning industry, to delay enforcement of its new Code of Ethics and Standards of Conduct until next summer. The letter does not ask the CFP Board to reconsider or delay its new standards that go into effect Oct. 1, only that the organization delay enforcement until June 30, 2020, when advisors are required to comply with the Securities and Exchange Commission's latest rule package.
The FPA, which includes thousands of CFP designation holders, sent the same letter to its members Monday morning, association executives told WealthManagement.com.
"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. 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," the letter said.
The CFP Board approved its new Code of Ethics and Standards of Conduct last year; it mandates that all holders of the designation who engage in financial advice be held to a stricter fiduciary standard than previously demanded. That proposal prompted threats from some large brokerages that they may abandon their support of the designation.
FPA believes an enforcement delay will give its dually registered members more time to make the necessary changes to comply with the standards. Otherwise, CFP holders and their firms will have to fully integrate separate changes only nine minths apart. Advisors are already undergoing changes after the SEC voted June 5 to finalize a rule package that includes a best interest standard of conduct for broker/dealers. FPA executives expect firms to prioritize compliance with the SEC standards.
In a statement, the CFP Board said it will be discussing the requests made by the FPA and other groups regarding the enforcement date of the new standards.
Other industry organizations that represent CFP holders have taken a more combative stance against the board's fiduciary mandate. In their own letter last week, the American Securities Association accused the CFP Board of subverting the authority of the SEC by holding certification designees to a standard of service beyond what is required by law.
The CFP Board has stated that advisors that adhere to its standards "will not be in violation of Regulation BI, or any other existing laws and regulations, by doing so" and they "complement, rather than conflict, with the law."