Still, CFP Board officials conceded there was some controversy about adopting the expanded fiduciary standard and how it will be applied. For instance, board officials on Wednesday night emphasized that the CFP practitioner, if he or she expects to retain the CFP marks, must maintain the new fiduciary standard even if it conflicts with the standard of a broker/dealer or some other employer.

CFP Board officials said moving the CFP profession to a tougher fiduciary standard triggered debate in the industry as professionals commented on the changes. It is a debate that, in some cases, continues, which is why they are asking for feedback in how the new code is applied.

The essence of the change is how the CFP avoids conflicts of interests and where and how the broader fiduciary standard is applied.

The professional, according to the revised code, must disclose all potential conflicts in providing advice. “This obligation,” according to the code, “is to provide the client with sufficiently specific facts so that the client is able to understand the [CFP] professional’s conflicts of interest and the business practices that give rise to the conflicts, and give informed consent to such conflicts and reject them.”

The CFP must also “place the interests of the client above the interests of the CFP professional,” said Blaine Aikin, chairman of the Fiduciary (Fi) 360 committee and a longtime member of the CFP Board. Conflicts need to be “more fully disclosed,” Aikin added.

He cited an example of a situation that could potentially pose a conflict of interest and how the professional should act. Say a CFP wanted to sell a client a car. Both parties agree on a price.

Can this transaction be completed under the new code? No, CFP Board officials said.

Under the new code, a CFP professional and the client would agree on an independent assessor to determine what was a fair price before the deal could be completed, Aikin said.

Disclosing Conflicts 'Not Enough'

Rydzewski added that disclosing any potential conflict of interest is “no longer enough” under the new rules. “You have to manage the conflict.” This is the only way a CFP can act in the client’s best interests, he added.