For starters, let's keep the ethics in the CFP ethics code.

    Several weeks ago, I had a discussion with a nonfinancial planner who had completed all of the CFP educational requirements. He had no ambition to change professions and pursue the designation, so I asked him the obvious question: "Why did you decide to invest the time and effort for all of this education?"
    His answer was an indictment of our profession and the way many people perceive those of us who are practitioners. "I couldn't find anyone I could trust." He went on to describe some of the horror stories we all have heard about people who held themselves out as "financial planners," who were merely sales people more interested in how much money they would make than in providing sound objective advice for their clients.
    In addition to unethical sales people who prey on the financial ignorance of their customers, who desperately need someone to help them through the complexities of financial products and services, there are others who are "enablers." The actions of these individuals and organizations are what lead so many to forgo the advice of planners and do it themselves, often to their long-term financial detriment. Rather than do the research to find ethical, competent advisors, they paint our entire profession with a broad brush and label us as "untrustworthy." Imagine what the medical profession and our health would be like if a large part of our population felt they could not trust doctors. Or if journalists wrote that most people would be physically better off if they treated their own illnesses. Study after study validates the fact that individuals who choose to manage their own finances consistently make the mistakes that competent financial advisors would have them avoid. Yet financial columnists simplify the process of financial planning to one item-expenses. If you could save money, they tell their readers, you must be better off doing it yourself, particularly since "it is so difficult to find a financial planner you could trust."
    Of course, the issue here is one of perception and not necessarily reality. I believe that the vast majority of financial planners are ethical and want to do what is right for their clients. But many of them are in systems that promote, if not encourage, behavior that is meant to provide revenue for their firms and not sound advice for their clients. Representatives at many wire houses and other broker/dealers are rewarded for transactions that add to the bottom line, regardless of the effects on their customers. These organizations are enablers of the pervasive lack of trust that is perceived by so many. If they wanted to prove that they are, as promoted in so many of their commercials, truly interested in putting their clients' interests first, why are they lobbying for the "broker'/dealer exception"? Why would they resist the fiduciary and disclosure requirements that those of us who are registered welcome? In 2000, when I was president of FPA, I was on an SEC panel discussing advisory issues. Also on that panel was a lawyer from Merrill Lynch. I asked him why his company was objecting to having their representatives register as investment advisors. Was it because their ads really didn't mean what they said, and they didn't put the clients' interests first, or was there something in their sales practices that they did not want to disclose?     Unfortunately, I never got to hear his answer, because the moderator, who was with the Securities and Exchange Commission (SEC), cut off the discussion.
    That brings me to the next major enabler of lack of trust, and it comes from a place that is meant to protect investors, not enable untrustworthy activities-the SEC. It caved in to the requests from major wirehouses to grant them the exception to RIA registration, and exacerbated the problem when they could have led the way and demonstrated that their highest priority was consumer protection-not preservation of the status quo for brokerages. Is there anyone who can convincingly make the argument that consumers are better off when their advisors are not required to place their interests first, or who do not need to be informed of conflicts of interests their representative may have? Unfortunately, as stated by FPA President Dan Moisand in his speech to his members in Nashville, "The rules that affect the profession have been driven by the financial services industry ..." This rule is certainly no exception. I may understand (but not agree) with the hesitancy of many of the large broker/dealers to support this new rule (TD Ameritrade is a notable exception), but I have been puzzled since 1999 (when the exception was first proposed) that the SEC has insisted on staunchly defending its position. Quoting Dan Moisand again: "The SEC basically bought into the argument that the industry would act more like they place the clients' interests first as long as they weren't actually required to place the clients' interests first. The SEC failed when they put the desires of industry over the safety of the citizens they were charged to protect." Hopefully, FPA will prevail in its lawsuit. In the meantime, the SEC continues to be enablers.

A bold statement could have been made by the CFP Board (and it still has an opportunity to do so) when it revised its code of ethics. Instead, it chose to offer its certificants the opportunity to be or not be fiduciaries in each client relationship. Imagine a Hippocratic oath that gave doctors a choice with each patient to adhere to it or not, depending solely on the doctors' discretion. If we are to build a true profession of financial planning, we need the cooperation of an organization that should be its number one champion. CFP Board can define true financial planning as delivered by CFP practitioners. In all client relationships they must be held to a fiduciary standard that they cannot dismiss merely because they choose to. One must not be permitted to put on the fiduciary hat when it is convenient and remove it when it is not. Actually, this may actually result in behavior that is opposite to the spirit of the fiduciary relationship: "I will be a fiduciary only when it is in my best interests to be one."
    Dan Moisand again, because he has said it better than I have heard from anyone: "For planning to become a profession in the eyes of the public there is simply no circumstance under which it should be optional for a practitioner to act, using CFP Board's own definition, 'in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and in a manner he or she reasonably believes to be in the best interests of the client'. Any value statement that ends with a statement like 'but don't hold me to that' is no value whatsoever."

As unlikely as it is that the SEC is in the role of enablers, it is even more disturbing that CFP Board is choosing this course (inadvertently, I'm sure). They may be concerned about a potential reduction in the number of CFP' certificants, and that is understandable, but it is not an excuse for lowering standards. A profession that is trusted by the majority of people will not survive when only those who choose to follow high standards. Would the medical profession, if it faced a shortage of doctors, resort to that strategy-to the detriment of the health of its patients? Individuals need to know where and how to find the ethical planners they so desperately need. The enablers of this lack of trust must step up and do what is right. For practitioners it's placing the clients' interests first, even when not legally required to do so. For large wirehouses, they need to understand that business is not leaving them and being transferred to independent advisors because of the fee structure. It is because most of these people are registered as investment advisors and follow the spirit as well as the letter of the fiduciary relationship. Wirehouses will soon discover that doing what is right is actually good for business. And CFP Board needs to revisit its changes to its Code of Ethics and hold all of its certificants to the highest standards of our profession. Perhaps when these enablers change their behavior, we won't find very many people who say, "I couldn't find a financial planner I could trust."

Roy Diliberto is chairman and founder of RTD Financial Advisors Inc. in Philadelphia.