CFP Board Standards vs. Reg BI: A Chart Prompts Industry Chatter

Both sets of standards took effect on June 30.

Kevin Keller, CFP Board’s CEO, told ThinkAdvisor in a Wednesday email message that while both standards “impose a ‘best interest’ standard of conduct,” there is also “an important difference in the standards of conduct: CFP Board explicitly adopted a fiduciary standard, but the SEC said that it did not.”

CFP Board’s fiduciary duty – along with the entire Code and Standards, Keller said, “is consistent with CFP Board’s mission to benefit the public. Professional bodies, such as CFP Board, exist in part to set standards that go beyond those required by the law, for the benefit of the public and the profession.”

In commenting on Kitces’ LinkedIn post, Knut Rostad, president of the Institute for the Fiduciary Standard, stated that while it’s “interesting to compare the nuances of Reg BI and CFP [Board] standards, what these differences mean for CFPs and their policies and procedures and for their customers in practical terms is unclear.”

In another comment on Kitces’ LinkedIn post, Garry Mettler, a recruiter calling himself an “Annuity Maestro,” said the comparison “just seems like so much ‘hair splitting’ to me and all this linguistic battling is causing a great source of confusion. Legally, is there such a thing as a ‘prudent professional’ standard vs a ‘reasonable person’ standard? Or are these a mere convention of terms deployed by the various battling regulatory interests with their own axes to grind? Mechanically, how is one addressed over the other? What does one mechanically do (every day steps) to operate within these two definitions that make them so [different], if differences actually exist? Let’s get down to specific mechanical differences.”

— Related on ThinkAdvisor:

• CFP Board to Offer Remote Exam Option
• CFP Board Names Chair-Elect
• Reg BI Has Kicked In. Here’s What FINRA Expects