The eight firms argued, however, that the proposal will hurt firms and CFP license holders who use a commission-based brokerage model—as well as those investors who may be better served by commission sales rather than fee-based accounts.

Waiting On The SEC

“We expect the SEC will propose a best-interest standard of care that is business-model neutral,” the firms said.

The group also said it expects that the SEC will not apply its forthcoming best-interest standards to brokerage relationships or require “potentially costly financial planning services … which discourage the use of brokerage as a service option.”

The CFP Board rejected a similar request for a delay from the eight firms’ membership association, SIFMA, in late January. While many firms say that the DOL fiduciary rule has become the law of the land, the agency has extended full implementation until July 2019 in response to the outcry from broker-dealers and a memorandum from President Donald Trump directing the agency to review the rule.

It should be noted that both SIFMA and the Financial Services Institute are suing the U.S. Department of Labor in appeals court to force the agency to rescind its “best-interest rule.”

CFP Board General Counsel Leo Rydzewski said that the certification body formulated proposed standards that it believes are the best path forward, but will review and consider all comments. “We look forward to reviewing the comments as we move forward in the process of developing a new Code of Ethics and Standards of Conduct for CFP professionals,” Rydzewski said.

The eight B-Ds are likely to remain tough customers of best-interest rules. Inconsistent regulations are already hurting the marketplace, the group argued. If the CFP Board goes forward with its revised proposal, it will contribute to the “growing problem of overlapping inconsistent standards of conducts,” the firms said.

“Unfortunately, the revised proposal is in direct conflict with a harmonized best-interest standard of care,” the group of eight said in their letter. “The proliferation of different standards of care across accounts, state lines, products and, potentially, professional designations does not provide clarity or reliability for investors. … If CFP Board revises its Standards of Conduct now, the changes would come in the midst of multiple regulators, including the Department of Labor, adding new and different standards of care applicable to different account types when providing investment advice.”

The timing is also problematic for the firms. While the CFP Board expects to finalize its standards by January 1, 2019, the board failed “to account for the SEC’s stated intention to advance its own best-interest standard of care in the coming months.”