CFP Board drafts revised code of conduct

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The Certified Financial Planner Board of Standards has proposed a set of revisions to its Standards of Professional Conduct setting ethical standards for CFPs.

The draft, called a Code of Ethics and Standards of Conduct, would broaden the application of the fiduciary standard, effectively requiring CFPs to put their client’s interest first at all times. Under the CFP Board’s current standards, CFPs are required to act as fiduciaries when providing financial planning. Many accountants, including CPAs, are also CFPs, particularly those who specialize in offering financial planning services. The Labor Department’s fiduciary rule took effect earlier this month after repeated delays, requiring advisors to put their client’s interest first when providing advice on retirement plans such as 401(k)s and IRAs.

The revised standards include a presumption that CFPs are required to provide financial planning when providing financial advice, while also outlining the factors the CFP Board will weigh in determining whether financial planning is required.

The revisions update the CFP Board’s Practice Standards, with the financial planning process beginning after the engagement has formed, with goals selected after a CFP has developed an understanding of a client’s personal and financial circumstances.

The new standards include a revised process for addressing bankruptcies of CFPs. Bankruptcies are now among the types of adverse conduct that will be handled through the CFP Board’s disciplinary process, returning the board to the process it had in place before 2012.

The new definition of “financial planning” is briefer in the revised standards. Financial planning is defined as “a collaborative process that helps maximize a client’s potential for meeting life goals through financial advice that integrates relevant elements of the client’s personal and financial circumstances.”

The CFP Board is asking for comments on the draft proposals over the next 60 days, until Aug. 21, 2017. To read the proposed standards and comment, visit

The Financial Planning Association, the largest membership association for CFP professionals in the U.S., already weighed in Tuesday with a comment. “FPA believes that on behalf of the public and the profession, CFP professionals must act in the best interest of their clients at all times,” said FPA president Shannon J. Pike in a statement. “We commend CFP Board for forming the Commission on Standards to review and identify improvements to the high standards that all CFP® professionals must adhere to. We applaud their efforts in seeking to raise the bar in the profession. FPA has been a staunch advocate for an unambiguous fiduciary standard for years and has proudly worked collaboratively with CFP Board and NAPFA as partners in the Financial Planning Coalition to advocate for this high standard. FPA’s actions over the years to advocate for a fiduciary standard have led to meaningful awareness and advancement of the profession.”

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