Just a week after the Financial Planning Association asked the Certified Financial Planner Board of Standards to delay enforcement of its fiduciary mandate, the CFP Board announced it will push back the compliance date for its new Code of Ethics and Standards of Conduct to June 30, 2020. That coincides with the compliance date for the Securities and Exchange Commission’s latest rule package, which includes Regulation Best Interest. The new standards will still go into effect on Oct. 1, 2019.
“Since the beginning of the nearly four-year process to review our standards, we said that CFP Board would not be led by actions regulators take, but we won’t ignore them either,” said Susan John, chair of the board of directors. “The Board however, does believes that the alignment of the SEC’s enforcement date of Regulation Best Interest is helpful to our CFP professionals in that there is significant overlap in the two sets of standards, with the notable exception that CFP professionals are required to act as a fiduciary whenever they are providing financial advice to clients.”
Between Oct. 1, 2019 and June 29, 2020, the organization will enforce its existing standards of conduct for CFP designees. The move will give CFPs more time to modify their policies and adapt systems to comply with the new rule.
The CFP Board said the change was in response to input from CFPs, firms they work for and member associations, including the FPA, which sent a letter to John last week. FPA executives said its dually registered members, in particular, need more time to make the necessary business adjustments.
The CFP Board approved its new Code of Ethics and Standards of Conduct last year, mandating 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.
And recently, 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.
During a conference call on Monday, John emphasized that the code itself is not changing, and that “CFP Board’s commitment to require CFP professionals to adhere to a fiduciary duty when delivering financial advice is iron clad.”
Starting Oct. 1, the 215 CFP programs at colleges and universities will include education on the new standards. Ethics continuing education will also be focused on the new standards, as will the November 2019 CFP exam. The CFP Board will also begin awarding experience credits, which is expanding to seven steps, based on the new standards.