In an analysis on the new standard, CFP officials said some commentators objected to the phrase “at all times” in the application of the fiduciary duty.
But in both the CFP Board commentary and in statements on Wednesday night, board officials said “the language serves the important purpose of reinforcing that there are no exceptions to a CFP professional’s duty to act as a fiduciary when providing financial advice.”
Where is the border between being covered and not covered by the new standard? “The provision of advice triggers the fiduciary responsibility,” Aikin said. “If you’re not providing advice,” he added, “that would not be covered.”
And the new fiduciary standard applies to CFPs regardless of the kind of business where the professional works.
“The fiduciary duty is business model neutral as it applies to all CFP professionals regardless of the business model in which they operate,” said the CFP Board commentary.
“Regardless of the contractual obligation, the obligation is on the CFP professional individually to ensure that they are acting as a fiduciary in providing services to the client,” Rydzewski said.
Rydzewski, in response to a question from Financial Advisor after the meeting, said some firms, in commenting on the new standard, have said the new code could pose problems. It is an issue that the CFP Board acknowledges in its commentary on the new standard.
“CFP Board recognizes that some firms may incur additional costs associated with a CFP professional’s compliance with CFP Board’s fiduciary duty.”
Aikin added that the board is attempting to find ways to avoid these potential conflicts between a firm and an advisor complying with the new CFP fiduciary standards.
CFP Board officials said they are looking for help in putting these standards into effect. They are asking for comments, questions and suggestions. And Rydzewski emphasized that the board was asking for help in how it could provide CFPs with effective guidance in understanding the new code.