Peggy Cabaniss, chairwoman of NAPFA, called the optional fiduciary standard a "step forward" but still short of where NAPFA wants to see the line drawn.
"They still are not saying to be a CFP you have to put the client's interest first," she said.
Roy Diliberto, the head of RTD Financial Advisors in Philadelphia, says
he is somewhat concerned about the on-again, off-again use of
fiduciary. "My concern centers on taking the fiduciary hat on and off
at will," he
explained, saying this makes it hard to claim financial
planning is a true profession. "Doctors can't drop the Hippocratic oath
whenever they feel like it."
When it comes to CFP licensees disclosing their non-fiduciary status to clients, Diliberto asks, "How big will the print be?"
In a statement posted on its Web site today, the CFP Board defended its decision not to impose a fiduciary standard on all its certificants, saying the standard isn't applicable in all situations.
"The standards should apply to all people with a right to use CFP Board's trademarks, and many of those people have jobs where it would not make sense to call them fiduciaries," the CFP Board stated. "For example, a CFP certificant providing employee financial education or other teaching services is not engaged in the type of activity where a fiduciary standard is appropriate."
The debate also reflects the schism that currently exists between CFP mark-holders who are investment advisors-who under SEC regulations are already subject to a fiduciary standard-and CFP licensees who are brokers, who are subject to a less stringent "suitability" requirement. Observers have noted that a blanket fiduciary requirement for CFP certificants would cause a significant disruption in the brokerage industry.
The CFP Board says it will accept public comments on the draft changes up until September 25 and will consider the public input at its October 24 meeting. A public hearing will also be held regarding the draft at the board's August 5 meeting in Santa Monica, Calif.