More On Legal & Compliancefrom The Advisor's Professional Library
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- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
The American Institute of Certified Public Accountants issued on Tuesday additional guidance for CPAs who also offer financial planning services.
Noting that membership in the AICPA’s personal financial planning (PFP) section has grown 32% in the past five years, the AICPA issued the guidance to provide planners that hold its Personal Financial Specialist designation with more “authoritative standards” for growth areas such as estate, retirement, risk management and investment planning.
The guidance, laid out in the Statement on Standards in Personal Financial Planning Services, will become effective on July 1, and covers all aspects of the planning process, from obtaining information to communicating and implementing recommendations. AICPA says the standards “require complete transparency on factors such as compensation and potential conflicts that could influence client decision-making.”
“CPAs, through state licensure and professional oversight, must meet the highest bar of competency, objectivity and integrity,” said Lyle K. Benson, CPA/PFS, who chairs the executive committee of the AICPA Personal Financial Planning Section, in a statement. “These standards provide a clear roadmap for achieving that benchmark in a rapidly evolving practice area. They are built on the cornerstone of the CPA profession — the public interest — and enhance the consistency and rigor that CPAs are known for in the financial planning discipline.”
AICPA cites information from the Bureau of Labor Statistics, which projects that the number of personal financial advisors will increase 27% nationwide between 2012 and 2022.
The new standards are based on, and will supersede, the AICPA Statement on Responsibilities in Personal Financial Planning Practice, which was first adopted in 1992.
Check out How the IRS Can Ruin Your Retirement on ThinkAdvisor.