Look here to learn why CFP Board periodically makes changes to the Standards.
CFP Board wants all CFP® professionals to have a thorough understanding of the Standards of Professional Conduct. Questions not answered in these FAQs may be sent to firstname.lastname@example.org for consideration and possible inclusion in future revisions of this document.
Question 12-1: Why did CFP Board revise the ethical standards for CFP® professionals?
CFP Board continually updates its standards and procedures, and the current Standards, which includes the Code of Ethics and Professional Responsibility, Rules of Conduct, Financial Planning Practice Standards and Candidate Fitness Standards, reflect the most recent of such initiatives.
- The first Code of Ethics was introduced in 1985, and revisions were made in 1988, including the introduction of the first Disciplinary Rules and Procedures.
- The next major revision, in 1993, established the Principles and Rules of the Code of Ethics.
- The Board of Practice Standards began work on the Practice Standards in 1995 and the Practice Standards were first published in 1999.
- The Practice Standards were finalized in 2002, and in 2003 the 400 series in the Rules was revised.
- The Candidate Fitness Standards were introduced in 2006 and took effect in 2007.
- The latest revision of the Code of Ethics, Rules of Conduct and Practice Standards began in 2005, and the updated Standards took effect July 1, 2008, with an enforcement date of January 1, 2009.
CFP Board's governing Board has responsibility for ensuring that the ethical standards for CFP® certification remain strong, enforceable and appropriate for the current regulatory and business environment. When CFP Board's ethical standards were first introduced, the very concept of financial planning as a profession was newly formulated. The business and regulatory environment that existed then was very different than the current environment.
Question 12-2: Are the current Standards stronger than the former Standards?
Yes. While many standards were left unchanged, the following key existing standards have been strengthened:
- The baseline duty of care for those holding CFP® certification has been raised from the former "reasonable and prudent professional judgment" standard to a requirement that a CFP® professional "shall at all times place the interest of the client ahead of his or her own." [See Rule 1.4]
- For CFP® professionals providing financial planning services, the duty of care has been raised from the former duty to "act in the interest of the client" to the current "duty of care of a fiduciary," which is partly defined as acting "in the best interest of the client." [See Rule 1.4 and Terminology]
- Requirements for disclosures to clients and prospective clients, and requirements for documentation of the relationship with a client have also been strengthened. The Standards also clarify that the disclosure requirements for CFP® professionals apply to clients as well as prospective clients. [See Rules 1.2 and 2.2]
These latest revisions are intended to maintain CFP Board's high ethical standards, strengthen them in several important ways, and present the Standards in a manner that will be easily understood by CFP® professionals and the public they serve.
Did This Answer Your Question?
CFP Board welcomes questions about specific aspects of the Standards of Professional Conduct and their application to specific situations.
CFP Board will consider all questions submitted and draft a response where it determines that interpretation of the Standards is needed. For responses that it believes would be helpful to all CFP® professionals, CFP Board will publish its response in CFP Board’s newsletters and on CFP Board’s website.
Send your questions and requests for guidance documents to CFP Board at email@example.com.
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