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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.'
Reported by Alison Cooke
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.”
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