CFP holders will now also be held to rules guiding recommendations of additional professionals or technology to clients, requiring that planners exercise reasonable care or judgment in their recommendations and disclose any conflicts of interest involved. When third party professionals are recommended by CFPs, the standards now require that CFPs communicate with the other provider about the scope of their services and inform the client if the services provided were not performed as expected.
The CFP Board has also proposed limiting the services a CFP professional can provide in the absence of a client agreement to engage for financial planning. If a client agreement is not signed, the CFP professional must limit the scope of their engagement to services that would not require the application of practice standards or not enter into or terminate the client engagement.
Finally, the new standards also rewrite requirements for the financial planning process. The standards now explicitly require that CFPs gather qualitative and quantitative information about their clients, address incomplete information and analyze the information.
The new standards then guide the planning process from onboarding to implementing a financial plan and monitoring clients’ progress.
A 60-day comment period for the proposed changes began Tuesday and is slated to end Monday, Aug. 21, 2017. Kevin Keller, CFP Board CEO, said he expects the rule to be finalized by year-end.
The CFP Board will solicit comments for the proposed changes at public forums throughout the country. As of Tuesday, eight public sessions have been announced:
- July 24 Tampa
- July 24 Atlanta
- July 25 New York
- July 25 Detroit
- July 26 St. Louis
- July 26 Dallas
- July 27 Phoenix
- July 27 San Diego
In addition, the CFP Board will accept written comments.
The CFP Board Commission on Standards will review the comments and propose changes after August 21.
The Board will then review and publish the recommended changes, which will become effective on a date to be determined.