CFP Board Rejects Request By FSI, SIFMA To Delay New Advisor Standards

The Certified Financial Planner Board of Standards has declined a request by two financial organizations to delay revisions of its conduct standards that have been in the works for more than two years.

The Financial Services Institute (FSI) and the Securities Industry Financial Markets Association (SIFMA) asked for a delay until after the Securities and Exchange Commission acts on a new fiduciary standard, which also is under review by the U.S. Department of Labor.

The CFP Board, however, rejected the idea of holding back.

The “CFP Board appreciates that SIFMA and FSI recognize the need for a heightened standard for investment advice," the CFP Board said in a statement. "As longtime advocates for a fiduciary standard for all financial advice, we believe that there is never a wrong time to do the right thing.” 

The two organizations said they made the request because there are different organizations considering various sets of regulations affecting broker-dealers and financial advisors, a situation that could be confusing to advisors and investors.

“We share [the] CFP Board’s interest in ensuring that financial advisors act in the best interest of their customers,” said Kevin Carroll, SIFMA managing director and associate general counsel, in a statement. “The SEC is currently working on a best interest standard that would apply to all financial advisors–not just CFP certificants, expected later this year.  It would be counterproductive for the CFP Board to front-run the SEC’s efforts. The CFP Board should pause and allow the SEC to take the lead.”

Likewise, Robin Traxler, vice president of regulatory affairs and associate general counsel of FSI, said, “FSI has long supported the adoption of best interest fiduciary standard that applies to all financial advisors. As a result, we have been following CFP Board’s well intentioned effort closely.

“However, while [the] CFP Board has good intentions in its proposal, they are one of many actors currently in the fiduciary space. With the DOL, the SEC and states such as Nevada all at various points in the process of developing standards of care for financial advice, there is a high risk of the industry ending up with multiple, conflicting standards,” Traxler added.

“This will cause serious confusion among investors and advisors. We believe CFP Board should delay their proposal until the SEC standard has been sufficiently developed and implemented so that both investors and the industry are clear on what duties exist and how they apply,” he said.

In the meantime, parts of the the DOL fiduciary rule may be tied up in court and President Trump has asked the DOL to conduct another review of the DOL rules.