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CFP Board Adopts Revised Ethical Standards for Certified Financial Planner™ Professionals

May 31, 2007

Revised Standards Strengthen Ethical Guidelines for CFP® Professionals and Help Foster Greater Consumer Confidence

DENVER, May 31, 2007 - The Board of Directors of Certified Financial Planner Board of Standards Inc. (CFP Board) has adopted a revised version of its Standards of Professional Conduct, which set forth the ethical standards for CERTIFIED FINANCIAL PLANNER™ professionals. The revised ethical standards apply to the more than 54,500 financial planners in the U.S. who are authorized by CFP Board to use the CFP® certification marks. The revised standards become effective July 1, 2008.

“Ethics has always been a vital part of the requirements for CFP® certification,” said Karen P. Schaeffer, CFP®, Chair of CFP Board’s Board of Directors. “CFP Board believes these updated standards reflect the level of ethical service the public deserves from financial planning professionals.”

The revised standards require a CFP® professional to “at all times place the interest of the client ahead of his or her own.” The new language replaces the lower standard of “reasonable and prudent professional judgment” contained in CFP Board’s current Code of Ethics and Professional Responsibility.

The revised standards also require CFP® professionals who provide financial planning services do so with the duty of care of a “fiduciary,” a term partly defined as acting “in the best interest of the client.” The heightened duty of care significantly strengthens the current requirement that financial planning services be performed “in the interest of the client.”

Intensive review of CFP Board’s Standards of Professional Conduct began in 2005 with the Board of Directors’ decision to review all of CFP Board’s ethics-related functions. Two drafts of proposed revisions were released for public comment, and the Board of Directors appointed an Ethics Task Force to review the comments received and make recommendations a course of action.

“When we set out to update CFP Board’s ethical standards, we understood that input from CFP Board’s stakeholders was a necessary part of the process,” said Marilyn Capelli Dimitroff, CFP®, Board of Directors member and Chair of the Ethics Task Force. “The quality of the comments CFP Board received was impressive and demonstrated the financial planning profession’s dedication to high ethical standards.”

CFP® professionals found in violation of CFP Board’s ethical standards may be subject to public discipline, up to a permanent revocation of the right to use the CFP® marks. Through July 2008, when the revised standards take effect, CFP Board will undertake a campaign to educate CFP® professionals and financial planning educators about the impact of the revised standards.

“CFP Board believes the revised Standards of Professional Conduct move the ethical standards for CFP® certification forward in a way that benefits the public,” said Schaeffer. “We believe these updated standards are enforceable, strong, and presented in a manner that will help the public understand the level of ethical service they deserve from CFP® professionals.”

The mission of Certified Financial Planner Board of Standards Inc. is to help people benefit from competent, professional and ethical financial planning. CFP Board owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements. CFP Board currently authorizes more than 54,500 individuals to use these marks in the United States. 

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Updated Standards of Professional Conduct, effective July 1, 2008 (157 KB PDF file)

Current Code and Standards (446 KB PDF file)

Side-by-Side Comparison of Terminology (53 KB PDF file)

Side-by-Side Comparison of Principles (49 KB PDF file)

Side-by-Side Comparison of Rules (91 KB PDF file)

Side-by-Side Comparison of Financial Planning Practice Standards and Proposed Rules (49 KB PDF file)


CONTACT:
Jina Martingano, Manager of Communications
CFP Board
P: 303-839-0671
E: media@CFPBoard.org

Speaker's Bureau
CFP Board’s leadership and representatives are available for interviews and speaking engagements on personal finance, the financial planning profession, CFP Board and the CFP® designation.

Did You Know?

Among clients who work with an advisor, 87% of those working with a CFP® professional are satisfied or very satisfied, compared with 72% of those who work with an advisor without certification.
Anyone can call himself a “financial planner.” Only professionals who meet CFP Board’s rigorous standards can call themselves CERTIFIED FINANCIAL PLANNER™ professionals.
The 2013 Household Financial Planning Survey shows that those with a financial plan feel more confident and report more success managing money, savings and investments than those without a plan.
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