Carson Group says financial advisors working at wholly owned Carson Wealth offices must have a certified financial planner designation or similar professional credential within five years of joining the firm.
“At Carson, we believe in the importance of acting in the best interest of the clients that we serve,” said Jamie Hopkins, head of Carson Coaching and director of Retirement Research for Carson Group, in a statement.
(Advisors partnering with RIA Carson Wealth manage about $12 billion in assets.)
The move by the group, led by industry veteran Ron Carson, comes about a week after the Security and Exchange Commission’s Regulation Best Interest (or Reg BI) went into effect and the Labor Department proposed a new rule governing investment advice in retirement accounts.
“Our advisors are held to a fiduciary standard, but we believe that financial advisors need to go even further. It doesn’t end at putting a client’s interests first, there should be a legal standard,” Hopkins explained.
“We also owe it to our clients to uphold an ethics standard and we owe it to ourselves and the profession to continue to further our own education.”
While Labor and SEC continue their debate about the importance of acting as a fiduciary, research has shown individuals found it more important that advisors make recommendations in their “best interest.”
‘Fiduciary’ vs. ‘Best Interest’
Research done by Carson Coaching found that about 98% of investors believe it’s important for their advisors to give them recommendations that are in their best interest, while 86% say it’s important for their advisors to act as a fiduciary.
(The study was published recently in the Financial Planning Association’s Journal of Financial Planning.)
At the same, studies show that many investors do not fully understand what it means to be a fiduciary. As a result, Carson Group says advisors need to “demonstrate value and explain [the] fiduciary standard with common vernacular, perhaps focusing on the ‘best interest’ language.”
“We commend the Carson Group for its commitment to serving in the best interest of their clients through CFP professionals,” Kevin R. Keller, CEO of the Certified Financial Planner Board of Standards said in a statement. “CFP certification raises the bar for the profession and benefits consumers.”
The CFP Board’s new code of ethics and standards of conduct include an obligation that planners “act as a fiduciary, and therefore, act in the best interests of the client at all times when providing financial advice.” These policies, which went into effect last year, are being enforced as of June 30.
Nationwide, there are more than 87,000 CFPs.
“We also owe it to our clients to uphold an ethics standard and we owe it to ourselves and the profession to continue to further our own education,” Hopkins added.
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