Today the CFP Board put out a new Code of Ethics and Standards of Conduct, compliance with which is a requirement of CFP certification.
AFR applauds the CFP Board for its commitment to the fiduciary standard, and for acting seriously and in a principled way to serve investors. The new professional standards the board has unveiled create an expansive and specific duty of loyalty to the client, including a duty for CFP professionals to act in their clients’ interest, and without regard to the financial or other interests of the professional or their firm. Importantly, the standards do not accept the false prescription that disclosure alone can protect investors from the costly harm that conflicts of interest drive; they recognize that conflicts must be avoided or managed, and that this can only happen where there is a rigorous duty of loyalty, as well as of care. These standards will make an enormous difference for investors who do business with CFP certificants, contributing to more secure lives for individuals and families.
The regulators must act on the same principles in approaching fiduciary rulemakings; anything less leaves investors vulnerable to losing billions of dollars a year to ‘advisors’ who pitch investments that produce greater returns for themselves, but leave the clients earning less.