This is the fourth of several posts detailing the CFP Board enforcement process. This post will focus on what happens in the event a respondent is found to be in default.
When the CFP Board's new Code of Ethics and Standards of Conduct ("Code and Standards") takes effect on June 30, 2020, the CFP Board will expect 63,000 CFP professionals to act in the best interests of their clients at all times when providing an investor with "financial advice."
The new Code and Standards also address two specific compensation representations: the term “fee-only” and the term “fee-based,” which the previous standards did not specifically address. The Board explains in the Commentary that members of the public are interested in working with a fee-only financial planner, which has created an incentive for a CFP professional (and others) to describe their compensation method that way.
The Code and Standards note that no business model is conflict-free and that CFP advisors have a specific set of conflicts which they must disclose and manage under the new guidelines.
When the CFP Board's new Code of Ethics and Standards of Conduct ("Code and Standards") takes effect on June 2020, the CFP Board will expect all CFP professionals to abide by this more rigorous framework.
The Securities and Exchange Commission (SEC) has recently decided to lower its legal standard of client care for registered investment advisors. However, as of October 1st, the CFP board will proceed with its more demanding standards for client care, which could strip thousands of advisors of their CFP licenses.
Edward Jones is concerned. In an SEC filing earlier this year, it warned that fiduciary rule enactments by individual states “may have an adverse effect on the partnership’s financial condition, results of operations and liquidity.” Likewise, last year Edward Jones (and seven other brokerages) asked the CFP Board to delay its new fiduciary rules, urging that the SEC’s Reg BI instead should govern so as to avoid conflicts in the two rules.
Thank you for your professional assistance with this matter. You are very good at what you do.
Amidst swirling speculation regarding its connections with a client linked to the Prophecy Asset Management collapse, B. Riley Financial Inc. has conducted an internal
review, concluding no affiliations with the defunct hedge fund.
A recent analysis by Golsan Scruggs reveals a staggering 231 percent increase in errors-and-omissions (E&O) liability claims among registered investment advisor (RIA)
insurers.
According to a recent analysis, Reg BI-related actions quickly have ascended to the top five issues for FINRA, with fines totaling $6 million in 2023.
