How the CFP Board Is Advancing the Profession

CFP Board staff played an important role in the commission’s work, but it was the members of the Commission on Standards — CFP professionals with diverse business model backgrounds, volunteers with regulatory experience, a member of the public and a consumer advocate — who charted the path forward. They worked for nearly two years, held more than 100 meetings, and carefully reviewed more than a thousand thoughtful comments. The Board of Directors could not have been more pleased with this work. The commission made its recommendations and the Board approved the final Code of Ethics and Standards of Conduct in March 2018.

This was a turning point in CFP Board’s history, and another bold step forward for the financial planning profession. The Code and Standards has as its cornerstone the requirement that a CFP professional act as a fiduciary at all times when providing financial advice to a client. With the Labor Department’s fiduciary rule by the wayside and the proposed SEC best-interest rules still under consideration, CFP Board’s Code and Standards — once it goes into effect on Oct. 1, 2019 — will be leading the way on fiduciary. That is what a professional body is supposed to do.

Yet there is more work to be done. Now that the Standards have been adopted, the CFP Board recognizes that it’s time to educate CFP professionals, their firms and the public on what the Code and Standards requires. To help do that, CFP Board has once again drawn upon members of the profession to guide the way. We created the Standards Resource Commission — a blue-ribbon panel made up of successful, knowledgeable and dedicated volunteers who will help shape the various guidance documents and resources that CFP professionals and their firms will use in implementing the new Standards.

The commission, which will begin its meetings later this summer, has individuals representing various business and compensation models, firms of different sizes and public representatives. In developing its guidance materials, members of the commission will solicit stakeholder feedback and take other steps to draw on the resources of the profession. By including individuals with different perspectives, engaging with the CFP professional community and actively vetting its work product, the commission will understand how particular guidance will operate in each corner of the profession. This will allow the CFP Board to develop guidance materials with eyes wide open, and enable CFP professionals and their firms to incorporate the Code and Standards into their practices in a way that is workable while staying true to both the spirit and the word of the Code and Standards. This also will give the public the assurance that CFP professionals will have all the tools and resources they need to understand and abide by the new guidelines.

As the chair of the CFP Board’s Board of Directors, I can tell you that building a profession can be a rewarding challenge. But what makes it worthwhile is knowing that we are doing it together. This is a profession that is led by the profession and that draws on the resources of the profession to advance the profession. This is how we work best.

We now look forward to working with the members of the profession who are serving on the Standards Resource Commission as it embarks on its journey to develop meaningful guidance materials that will help CFP Board continue to fulfill its mission to benefit the public.

— Check out CFP Board: Fiduciary Hypocrites on ThinkAdvisor.

Richard Salmen, CFP, is chairman of the Certified Financial Planner Board of Standards’ Board of Directors.