On March 29, 2018, the Certified Financial Planner Board of Standards, Inc. announced that its Board of Directors approved a new Code of Ethics and Standards of Conduct for CFP® professionals. More than ten years ago, the CFP Board adopted the fiduciary standard for CFP® practitioners when offering “financial planning services” or “material elements of financial planning.” This standard required that the advisor act in the best interest of the client when providing financial planning services. To eliminate possible ambiguities and to raise the professional bar even higher, the CFP Board will require CFP® professionals to uphold the fiduciary standard anytime that he or she is providing financial advice. This is a monumental step forward in setting appropriate standards for the CFP® professional and for the profession of financial planning as a whole. Collectively, consumers, advisors, and financial firms will benefit from the CFP Board’s new Standards.
The Code of Ethics includes the following:
- Act with honesty, integrity, competence, and diligence.
- Act in the client’s best interests.
- Exercise due care.
- Avoid or disclose and manage conflicts of interest.
- Maintain the confidentiality and protect the privacy of the client.
- Act in a manner that reflects positively on the financial planning profession and CFP® certification.
The effective date for the new Standards is October 1, 2019. At Reid Financial Consulting, we will continue to review our policies and procedures to ensure that we meet the highest professional standards.