Relationships Covered by the CFP Board Code and the SEC’s Reg B-I

Posted on September 1st, 2020 at 3:00 PM
Relationships Covered by the CFP Board Code and the SEC’s Reg B-I

From the Desk of Jim Eccleston at Eccleston Law LLC:

This is the seventh 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 which relationships are covered by the CFP Board Code and Reg. B-I.

Reg. B-I applies to “retail customers.” Reg. B-I defines “retail customer” as “a natural person, or the legal representative of such natural person who (i) receives a recommendation of any securities transaction or investment strategy involving securities from a broker, dealer, or a natural person who is an associated person of the broker or dealer, and (ii) uses the recommendation primarily for personal, family, or household purposes.”

The CFP Board Code applies to any “client.” The CFP Board described the scope of “client” to be broader than the scope of “retail customer” under Reg. B-I. The CFP Board Code defines “client” as “any person, including a natural person, business organization, or legal entity, to whom the CFP professional provides or agrees to provide Professional Services pursuant to an Engagement.”

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.

 

Tags: SEC, CFP, Code of Ethics,

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