The group also said that when considering complaints against a CFP practitioner, “ambiguity in the disclosure provided to the client will be interpreted in favor of the client.”
“The greater the potential harm the conflict presents to the client, and the more significantly a business practice that gives rise to the conflict departs from commonly accepted practices among CFP professionals, the less likely it is that CFP Board will infer informed consent absent clear evidence otherwise,” the proposed disclosure states.
Last week, the CFP Board soundly rejected a request from the Financial Services Institute and SIFMA to delay its rule-making until the U.S. Department of Labor and the Securities and Exchange Commission promulgated their rules. The DOL has extended its review of its fiduciary rules, including its conflict of interest disclosure, until July 2019. The SEC has yet to propose any fiduciary or “best interest” standards, although the agency has said it is a priority to do so by the second quarter of 2019.
Kevin Carroll, SIFMA’s managing director and associate general counsel, said 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.”
The CFP Board is expected to finalize changes to the proposal in the second quarter of 2018 and make the new code effective January 1, 2019.