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.
Recently, the CFP Board announced that its Board of Directors unanimously approved a new Code of Ethics and Standards of Conduct (“Code and Standards”).
