It is pretty simple, if you don’t want to be held to the fiduciary standard of an advisor, make sure your title doesn’t suggest you are an advisor. And, yes that would even include “Certified Financial Planner”
A CFP licensee should first be presumed to be in the advice business. It shouldn’t be the client’s chore to figure out what’s what. The burden for being clear should be on advisors.
The SEC has failed to offer clarity to the public. FINRA is part of the problem. Congress? Give me a break.
What the CFP Board has done with this proposal is good because their definition of financial advice addresses the actions taken and actions that should be taken regardless of title but…what a huge statement the CFP Board could make if they took a stand on the name game! The media would love it and the public would be better served.
My name game and conflicts suggestions would raise the bar further, but I don’t want to diminish how bold the proposal is as it stands at this moment. I think it took guts to make these proposals and it will take guts for the board of directors to approve them. The standards will be very good for the profession but it may not be so great for the CFP Board. If that is true, I hope the effects are temporary.
Requiring more of a professional than the regulators or a planner’s employer requires is likely to give many CFP candidates and potential candidates pause. Some employers will lose their enthusiasm for the marks. Some current licensees will resign.
This would not be good for the CFP Board initially but it would be good for the profession. The public doesn’t need licensees that want the mark mostly for marketing purposes. The public needs professionals held to a high standard. Filling the public’s needs is why professions exist.
There may be a loss of licensees or a slowing of the growth of licensees but I think we would be losing people that need to get lost, so to speak. These standards make the marks more valuable. There is a fair chance that as that value is recognized more real professionals will be drawn to the marks.
There are many competent professionals that do not have the right to use the marks. Increased value may help them get over the hump and go through the certification process. Or not. Regardless, the level of professionalism of CFP licensees should trend higher.
Long term: With the bar set higher, new entrants to the profession should be dominated by people that see the credential as the CFP Board hopes it will be—the recognized standard of excellence for competent and ethical personal financial planning.