Major financial trade groups to CFP Board: Slow the effort to raise mark's fiduciary standard

SIFMA, FSI want the Securities and Exchange Commission to go first

Jan 25, 2018 @ 2:19 pm

By Mark Schoeff Jr.

Two prominent financial industry trade groups want the Certified Financial Planner Board of Standards Inc. to halt its effort to raise the designation's advice standard until the Securities and Exchange Commission has proposed its own fiduciary rule.

Last month, the CFP Board released a second draft of revisions to the standards of conduct attached to the mark.

Under the proposal, all CFPs, including brokers who hold the credential, must act in the best interests of their clients at all times when they are providing financial advice. The current standard holds CFPs to a fiduciary standard only during the financial planning process.

The CFP Board is taking comments on the proposal until Feb. 2 and has promised to issue a final rule by this summer.

Meanwhile, the SEC is planning to propose its own fiduciary rule this year and the Labor Department is reviewing its fiduciary regulation under a directive from President Donald J. Trump that could result in major changes.

The Securities Industry and Financial Markets Association, which represents brokerages and other financial institutions, wants the CFP Board to stand down for now.

"We share the CFP Board's interest in ensuring that financial advisors act in the best interest of their customers," SIFMA managing director and associate general counsel Kevin Carroll said in a statement. "The SEC is currently working on a best interest standard that would apply to all financial advisors — not just CFP certificants, expected later this year. It would be counterproductive for the CFP Board to front-run the SEC's efforts. The CFP Board should pause and allow the SEC to take the lead."

The Financial Services Institute, which represents independent broker-dealers, also said that it supports a best-interest advice standard — but not one from the CFP Board right now.

"While the CFP Board has good intentions in its proposal, they are one of many actors currently in the fiduciary space," Robin Traxler, FSI vice president of regulatory affairs and associate general counsel, said in a statement. "With the DOL, the SEC and states such as Nevada all at various points in the process of developing standards of care for financial advice, there is a high risk of the industry ending up with multiple, conflicting standards. We believe the CFP Board should delay their proposal until the SEC standard has been sufficiently developed and implemented so that both investors and the industry are clear on what duties exist and how they apply."

The CFP Board is going to forge ahead.

"CFP Board appreciates that SIFMA and FSI recognize the need for a heightened standard for investment advice," CFP Board chief executive Kevin Keller said in a statement. "As longtime advocates for a fiduciary standard for all investment advice, we believe that there is never a wrong time to do the right thing."

Over the last few weeks, the CFP Board has been trying to build momentum for its rule change. In December, it took out a full-page ad in the Wall Street Journal touting support for a revised fiduciary standard from investor advocates and consumer groups.

In the Jan. 29 edition of arjuna-design, the CFP Board will run another full-page ad. This one is an open letter from 21 academicians who lead programs at universities around the country that confer bachelor's degrees in financial planning.

"We strongly encourage our students and graduates to pursue careers at financial services firms that support the high standards of CFP certification and embrace fiduciary advice," the professors wrote.

The CFP Board administers the educational and ethical standards for the designation. There are more than 80,000 CFPs in the United States.


What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Apr 30


Retirement Income Summit

Join arjuna-design at the 12th annual Retirement Income Summit - the industry's premier retirement planning conference.Much has changed - and much remains to be learned. Attend and discuss how the future is full of opportunity for ... Learn more

All of the noise in the District of Columbia is distracting your clients. Ben Phillips of Event Shares explains what deserves your attention (and what doesn't) as we head into 2018.

Recommended Video


Latest news & opinion

Independent broker-dealers are stepping up their game on recruiting from the wirehouses

Independent broker-dealers have narrowed the gap between themselves and the wirehouses and are able to attract more quality brokers from the Big Four.

Capital Group, sponsor of American Funds, wins 401(k) lawsuit

Decision comes as financial services companies, especially those focused on active management, have been sued for self-dealing.

SEC considers barring aggrieved investors from suing companies

Swept up by pro-business zeitgeist, regulator seeks to reverse two-decade slump in U.S. stock listings.

Wells Fargo, Morgan Stanley use contrary tactics to keep advisers

Wells is helping brokers transition to independence within the firm, while Morgan is taking them to court.

Fidelity pushes Vanguard to compete on brand in 401(k) plans

With Fidelity imposing an additional fee, Vanguard likely will look less attractive compared with comparably priced index-fund providers, advisers said.


Hi! Glad you're here and we hope you like all the great work we do here at arjuna-design. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Last News

500k life insurance cash out life insurance taxable razz calculator turbo tax software reviews mandatory withdrawals from retirement accounts afr home loans aon boston caliper personality assessment roth ira investment strategies retirement planning calculator for couples ryan mortgage income fund inc registering for medicare american funds growth fund of america r6 social security disability running out of money is a 1943 penny worth anything how much is hugh hefner worth late enrollment penalty for medicare part b when are social security checks mailed how much does a bloomberg terminal cost per month morgan stanley uk group pension plan american beacon large cap value inst widow social security benefits after remarriage are contributions to roth ira tax deductible midland national life insurance company complaints how much does it cost to hire a pr firm momentum income plus fund american funds 2040 target date retirement fund low price high dividend paying stocks self employed 401k contribution deadline widows benefits social security disability annuity lump sum calculator transamerica target date funds ubs wealth planning analyst salary wells fargo rates cd minimum required distribution 401k is mortgage interest on a second home tax deductible turbotax two state returns