CFP Board Compares its Conflicts of Interest Disclosure Rule to the SEC’s Reg B-I

Posted on August 18th, 2020 at 3:43 PM
CFP Board Compares its Conflicts of Interest Disclosure Rule to the SEC’s Reg B-I

From the Desk of Jim Eccleston at Eccleston Law LLC:

This is the fifth of several posts discussing the similarities and differences of the SEC’s recently-implemented Regulation Best Interest (“Reg. B-I”) and the CFP Board’s Code of Ethics and Standards of Conduct. In this post, we will look at the requirements regarding disclosure of conflicts of interest in the CFP Board Code and Reg B-I.

Both Reg B-I and the CFP Board Code require disclosure of conflicts of interest. The CFP Board Code requires “full and fair disclosure of all material conflicts of interest with the Client that could affect the professional relationship.” The CFP Board Code does not require that the disclosure be in writing. If the disclosure is made orally, “evidence of oral disclosure of a conflict will be given such weight as CFP Board in its judgment deems appropriate.”

Conversely, the SEC’s Reg B-I requires that the disclosure of a conflict of interest be made in writing. This written disclosure must identify the material fact and describe the process through which such fact may be supplemented, clarified or updated. The CFP Board clarified that a CFP professional who is a registered representative must comply with this Reg B-I requirement.

CFP professionals who receive an inquiry or a complaint from the CFP Board should contact the professionals at Eccleston Law for a free consultation.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.



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