In Practice May 31, 2007

CFP Revamps Ethical Standards

The Board of Directors of Certified Financial Planner Board of Standards Inc. (CFP Board) has revised the ethical standards for CFP professionals, requiring them to 'at all times place the interest of the client ahead of his or her own.'
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The current Standards of Professional Conduct, which set forth the ethical standards for CFP professionals, state a lower standard of “reasonable and prudent professional judgment.”

 

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The revised standards also require that CFP professionals who provide financial planning services do so with the duty of care of a “fiduciary,” a term partly defined as acting “in the best interest of the client.”

 

 

The revised ethical standards, which become effective July 1, 2008, apply to the more than 54,500 financial planners in the U.S. who are authorized by CFP Board to use the CFP certification marks. CFP professionals found in violation of CFP Board’s ethical standards may be subject to public discipline, up to a permanent revocation of the right to use the CFP marks.

 

 

The CFP Board began reviewing the Standards of Professional Conduct in 2005 and, since then, released two drafts of proposed revisions for public comment. The Board of Directors also appointed an Ethics Task Force to review the comments received and make recommendations a course of action

 

 

Deals & People May 31, 2007

Wachovia to Acquire A.G. Edwards

Wachovia and A.G. Edwards announced Thursday that Wachovia will buy A.G. Edwards for $6.8 billion in cash and stock.
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The deal will form the second largest retail brokerage firm in the U.S., according to the announcement on Wachovia’s Web site. The combined brokerage firm will operate as Wachovia Securities and be headquartered in St. Louis, Missouri, with 3,350 brokerage locations nationwide, $1.1 trillion in client assets, and 15,000 financial advisers.

Other A.G. Edwards businesses – including research, underwriting and investment banking, mutual funds and trust – will be consolidated into the appropriate Wachovia lines of business, the announcement said.

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The transaction is expected to close in the fourth quarter of 2007, and full integration is expected by the first quarter of 2009. After the acquisition Wachovia will be the second-largest American retail brokerage by number of brokers, after Merrill Lynch & Co. Inc., and Wachovia Securities will be the third-largest brokerage by assets and number of branches.

Daniel J. Ludeman, currently president and CEO of Wachovia Securities, will keep those roles at the combined brokerage firm. A.G. Edwards Chairman and CEO Robert Bagby will be Chairman of the brokerage firm.

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