Comments on: CFP proposes new standards http://wealthfly.com/blog/2007/03/19/cfp-proposes-new-standards/ A blog for investment advisors, brokers and financial planners. Tue, 06 Jan 2009 09:54:42 +0000 http://wordpress.org/?v=2.3.3 By: WealthFly » The RAND Report’s Unfortunate Conclusion http://wealthfly.com/blog/2007/03/19/cfp-proposes-new-standards/#comment-860 WealthFly » The RAND Report’s Unfortunate Conclusion Wed, 30 Jan 2008 17:48:17 +0000 http://wealthfly.com/blog/2007/03/19/cfp-proposes-new-standards/#comment-860 [...] don’t care and would just as soon use a commission-based broker. It also means Mike was right back in March when he said the CFP “code of ethics is silly and pointless”–at least in the eyes [...] […] don’t care and would just as soon use a commission-based broker. It also means Mike was right back in March when he said the CFP “code of ethics is silly and pointless”–at least in the eyes […]

]]> By: Matt Abar http://wealthfly.com/blog/2007/03/19/cfp-proposes-new-standards/#comment-74 Matt Abar Mon, 19 Mar 2007 21:56:09 +0000 http://wealthfly.com/blog/2007/03/19/cfp-proposes-new-standards/#comment-74 Well, the first step is definitely to have the regulations clearly spell out the level of responsibility a CFP has to his clients. So I disagree that this is just for marketing purposes; there's been a slow steady demand for a rewrite of the regulations for years. As far as whether we need stricter enforcement of the regulations... I'm not so sure--partially because I don't know the specifics of how it works now. You have a point that a CFP with a low moral bar may do unethical things regardless of how the regulations are worded. But I'm currently under the impression that such a CFP probably wouldn't retain his designation for very long. Eventually he would be reported by his client(s) and the disciplinary process would kick off, resulting in him losing the CFP designation. Well, the first step is definitely to have the regulations clearly spell out the level of responsibility a CFP has to his clients. So I disagree that this is just for marketing purposes; there’s been a slow steady demand for a rewrite of the regulations for years.

As far as whether we need stricter enforcement of the regulations… I’m not so sure–partially because I don’t know the specifics of how it works now. You have a point that a CFP with a low moral bar may do unethical things regardless of how the regulations are worded. But I’m currently under the impression that such a CFP probably wouldn’t retain his designation for very long. Eventually he would be reported by his client(s) and the disciplinary process would kick off, resulting in him losing the CFP designation.

]]> By: Mike Benson http://wealthfly.com/blog/2007/03/19/cfp-proposes-new-standards/#comment-73 Mike Benson Mon, 19 Mar 2007 21:43:13 +0000 http://wealthfly.com/blog/2007/03/19/cfp-proposes-new-standards/#comment-73 My point is that saying we are ethical is pointless. It takes actions not words. I agree that saying it is at least something. Now they need to start really enforcing it. My point is that saying we are ethical is pointless. It takes actions not words. I agree that saying it is at least something. Now they need to start really enforcing it.

]]> By: Matt Abar http://wealthfly.com/blog/2007/03/19/cfp-proposes-new-standards/#comment-72 Matt Abar Mon, 19 Mar 2007 21:38:59 +0000 http://wealthfly.com/blog/2007/03/19/cfp-proposes-new-standards/#comment-72 I'm extremely happy with the new regs. What we're fundamentally deciding here, is whether CFPs have a fiduciary responsibility to put the interests of their clients ahead of their own. Some current CFPs want that, and some CFPs don't like that level of responsibility. The CFP board has thankfully come down on the side supporting fiduciary responsibility. While this will undoubtedly lose them a few CFPs, it maintains the high standards that actually make it worthwhile for new candidates to pursue the designation. One of the reasons former CFP chair Sarah Teslik was so reviled was that she was trying to change the Standards in the other direction, so that CFPs would *not* have any fiduciary responsibility to their clients. Well that, and she said some really kooky things on Nightline that reflected poorly on our industry. So this should wrap up an ugly chapter in the CFP's history, with the CFP continuing to be the gold standard for investment advisors. I’m extremely happy with the new regs. What we’re fundamentally deciding here, is whether CFPs have a fiduciary responsibility to put the interests of their clients ahead of their own. Some current CFPs want that, and some CFPs don’t like that level of responsibility.

The CFP board has thankfully come down on the side supporting fiduciary responsibility. While this will undoubtedly lose them a few CFPs, it maintains the high standards that actually make it worthwhile for new candidates to pursue the designation.

One of the reasons former CFP chair Sarah Teslik was so reviled was that she was trying to change the Standards in the other direction, so that CFPs would *not* have any fiduciary responsibility to their clients. Well that, and she said some really kooky things on Nightline that reflected poorly on our industry.

So this should wrap up an ugly chapter in the CFP’s history, with the CFP continuing to be the gold standard for investment advisors.

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