Technical Revisions and Answers to Frequently Asked Questions for New Code of Ethics and Standards of Conduct

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Technical Revisions and Answers to Frequently Asked Questions for New Code of Ethics and Standards of Conduct

Nov 27, 2018

The Board of Directors of CFP Board recently adopted several technical revisions to the new Code of Ethics and Standards of Conduct. These technical revisions do not materially change the Code and Standards; instead, they provide clarity to several sections of the document. The most significant change is to specify when a CFP® professional must provide certain information to a Client. The new Code and Standards, as revised by the technical revisions, will go into effect on October 1, 2019.

Review a Redline Document Showing the Technical Revisions to the Code and Standards

The Code and Standards document, and related resources, have all been updated to reflect the technical revisions, and may be found on CFP Board’s website at www.CFP.net/Code.

Answers to Frequently Asked Questions about the New Code and Standards

In June 2018, CFP Board formed a Standards Resource Commission to provide guidance to CFP® professionals and their firms on the new Code and Standards. The blue-ribbon group is composed of individuals from financial services firms and members of the public. In response to questions received from stakeholders, including during public forums held in several cities in September 2018, the Standards Resource Commission has assembled responses to Frequently Asked Questions concerning the Code and Standards. Some of the key responses to FAQs address the following:

  • The structure of the Code and Standards;
  • The requirements of CFP Board’s new fiduciary duty;
  • The definitions of Financial Planning, Financial Advice, and other terms;
  • The changes to the Financial Planning process;
  • Why there are now seven steps in the Financial Planning process;
  • The circumstances in which a CFP® professional is required to comply with the practice standards for the Financial Planning process, including the factors that will determine when a CFP® professional is required to provide Financial Planning when providing Financial Advice to a Client;
  • The requirement to provide full disclosure of all Material Conflicts of Interest;
  • The duty not to make false or misleading representations of compensation method, including when a CFP® professional may use the term “fee-only” and what a CFP® professional must do when using the term “fee-based”; and
  • How CFP Board will handle bankruptcies under the new Code and Standards.

Read the new Frequently Asked Questions Document

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