The Certified Financial Planner Board of Standards has taken the last step necessary to pave the way for enforcement of its new Code of Ethics and Standards of Conduct starting on June 30, the board announced Friday.

The board approved numerous procedural rules, which are designed to spell out how and when the new code and standards will be enforced, said Kevin R. Keller, CEO of the CFP Board. The new requirements for CFP professionals have been more than five years in the making and have gone through several public comment periods to get feedback from advisors before the implementation date.

The procedural rules clarify the new process for advisors and for the public, added Leo Rydzewski, CFP Board’s general counsel. Information about the new code and standards, which were enacted October 1, 2019, but will not be enforced until June 30, is available on the board’s website, www.CFP.net. To help CFP professionals understand the updated enforcement process outlined in the new procedural rules, the CFP Board created an enforcement process guide, which includes flow charts that describe the investigative, settlement and hearing processes.

Under the new standards of conduct, the 87,000 CFP mark holders will be required to act as fiduciaries, putting the interests of their clients above their own, whenever they are providing financial advice. The fiduciary standard is extended to brokers or dually registered advisors. The procedural rules consolidate and replace the Disciplinary Rules and Procedures and the Appeal Rules and Procedures that were used by the CFP Board until now. The new standards define “financial advice” broadly as any recommendation to purchase, hold or sell any financial asset.

Among other things, the rules announced Friday consolidate procedures, expand the ability of the CFP Board to obtain information about advisors, make information on the new processes more accessible to CFP professionals, and clarify who may review confidential information.

The rules also do such things as establish expedited processes for complaints involving advisors who file for bankruptcy and limit the time in which the CFP Board staff can issue notices of investigations, which ordinarily will be seven years after the alleged violation. The rules also limit the time during which the CFP Board can issue a complaint against a CFP mark holder after starting an investigation.

The CFP Board has the ability to permanently or temporarily suspend the right of a CFP professional to use the CFP designation after it has found an advisor has violated the board’s standards of conduct. It also can issue a letter of admonition and put information about bankruptcies filed by advisors on its website. Members of the public can ask the board to investigate the actions of a CFP professional and the board will use other avenues to determine violations of the standards.

The CFP Board also updated several documents for consistency with the procedural rules, including the fitness standards for candidates for the CFP certification and for former CFP professionals who are asking for reinstatement to use the CFP mark.

Partially in response to the Covid-19 pandemic, the board already approved the use of video or telephone testimony for some investigations.

“This is a particularly important time for CFP professionals as more people are reaching out for financial advice to help them get through the current turmoil,” Keller said. “There are more than 200 certifications or designations that a financial advisor can earn, but only a handful set and enforce standards when advisors are providing financial advice. I have never seen another certification that names those mark holders who have not done right by the public.”

Many of the changes announced Friday seem technical, but they are important to advisors and the public, Keller added.

“When CFP mark holders are surveyed, they consistently say that setting and enforcing standards of conduct are the most important activities for the CFP Board, along with building the brand,” he said.