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How the CFP Board Is Advancing the Profession

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Professions advance when dedicated professionals lead the way. For more than 30 years, the Certified Financial Planner Board of Standards has relied on trusted leaders to advance the financial planning profession.

I remember vividly, just 10 years ago, when the CFP Board took a bold step in revising its Standards of Professional Conduct to require all CFP professionals to act as a fiduciary when providing financial planning. My predecessors on the Board of Directors at that time were volunteer leaders who hailed from all corners of the profession. They recognized that, as a professional body, the CFP Board has an important role in helping to shape the profession.  Individually, each offered a unique perspective about what CFP Board should require.  Collectively, they acted to advance the profession, benefit the public, and reinforce the great value of working with a CFP professional.

You can’t argue with the results. Since then, the number of CFP professionals has grown by 47% to an all-time high of more than 81,000 Americans who have satisfied the education, examination, experience and ethics requirements for CFP certification. According to Cerulli, this equates to one in four financial advisors.

CFP professionals operate under a wide variety of business models. Many of us are investment adviser representatives, registered representatives of a broker-dealer or insurance agents. Still others work in banks. Yet we all fall under the same CFP professional umbrella.

Throughout CFP Board’s history, so many of us have answered the call to volunteer service. CFP professionals from all regions of the country, of all ages, operating under every conceivable business and compensation model have devoted their time and energy to help the CFP Board build the financial planning profession. Volunteers have contributed to the certification examination, provided continuing education oversight, and shouldered the important responsibility of adjudicating alleged violations of the Standards of Professional Conduct.  They volunteer their time because they care deeply about a profession that is ethical, competent and growing.

Additionally, we work closely with other volunteer leaders from the Financial Planning Coalition. Along with the Financial Planning Association and the National Association of Personal Financial Advisors, we strive to increase awareness of the profession among policymakers. It’s this partnership among the three groups that makes the profession united and stronger than ever before.

Time and time again, a strong partnership between dedicated staff and committed volunteer leaders has enabled CFP Board to fulfill its important mission.  We saw how this worked most recently with CFP Board’s revised Code of Ethics and Standards of Conduct. In December 2015, CFP Board reached out to prominent members of the profession with a call to serve on a commission that would review and recommend changes to CFP Board’s Standards of Professional Conduct.

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.


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