Certified Financial Planning Board of Standards Inc. does not want to end up with a watered down Department of Labor fiduciary rule, says Blaine Aikin, chair of CFP Board.
Despite the Trump Administration’s lukewarm attitude toward the rule and the postponement of implementation of part of it until July 2019, CFP Board maintains its strong support and says it will continue providing input to the Department of Labor.
At the same time, the board wants to work with the Securities and Exchange Commission on the fiduciary rule the agency has said it will be working on.
“We have gotten indications the SEC might be leaning toward a rule that requires suitability [of products for clients] and disclosure [of fees],” rather than the stricter rule adopted by the DOL that requires advisors and broker-dealers who handle retirement accounts to act in the best interest of their clients, says Kevin Keller, CFP Board CEO.
“We would like to see SEC come out with a rule that treats taxable accounts and retirement accounts the same,” he added during a briefing of CFP Board leaders with the press at the Financial Planning Association annual conference in Nashville.
“What is important for the profession is when advice is involved, a fiduciary rule should be in place,” added Blaine Aikin, chair of the board of directors. In the past, when CFP Board has offered opinions to the SEC or DOL, the government bodies have been receptive, he said.
CFP Board also is in the midst of revising its own standards of conduct. On June 20, the board revealed sweeping conduct code revisions that would broaden the application of the fiduciary standard among CFP professionals. The board is reviewing comments from the public that have been submitted about the proposals.
“This will reach far beyond CFPs, because a firm is not going to have one set of rules for CFP professionals and another one for other advisors,” Keller said. Neither he nor Aikin would hazard an opinion on what might emerge from the comments that were submitted.
But they did predict most advisors of the future would have hybrid practices that combine human and digital advice. CFP Board has a digital advice working group to look at the future of digital advice and determine what its implications are for advisors.