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CFP Board Releases Sample Letters to Improve Client Communication

The letters are meant to help CFP professionals meet the duties for providing information to clients as required by the board's Code of Ethics and Standards of Conduct.

The CFP Board has released two sample engagement letters that CFP professionals can use to help inform clients on information they are required to provide under its Code of Ethics and Standards of Conduct.

While an engagement letter is not specifically required in order to fulfill the revised code, CFP professionals must provide certain information. According to CFP Board CEO Kevin Keller, the board received input from CFP professionals wanting sample letters to help them craft their own.

“The sample engagement letters use plain language to reduce consumer confusion, increase consumer trust and reduce the number of questions a consumer may ask regarding the engagement,” he said.

The first letter could be used in a situation in which a client is engaging a CFP professional for financial advice, while the second is designed for when a client is seeking out financial planning. The letters are meant to be useful but amenable, and the board stressed that they should not be sent as written but should instead be tailored to meet the needs of individual firms and advisors, as well as the particular circumstances of the client.

According to the code, any professional offering financial advice must disclose a description of the services, how the client will pay for products and services, how the professionals are compensated, as well as the professional’s public disciplinary history, among other stipulations. 

The new Code of Ethics and Standards of Conduct was originally approved in 2018, and went into effect on Oct. 1, 2019, with a compliance date of June 30 of this year.

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TAGS: Industry
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