That rule requires CFPs to operate as a fiduciary as defined by the CFP Board when providing financial planning services.
“Let’s acknowledge first off that all business models have conflicts,” Greene said.
Of the nearly 75,000 CFP holders, “certainly there are not that many who operate with a fee-only model,” Greene said. The question is how you eliminate, mitigate and disclose conflicts.
“In no way are we looking to water down that [current] standard” of care, Greene said.
The CFP Board has long been neutral on compensation models, which hasn’t sat well with some fee-only NAPFA members.
Greene and Keller urged advisors to comment on the proposed changes when they come out.
“When the comments come in, we may … have to go back to the drawing board,” Keller said.
“It’s no secret it was a little messy the last time” the standards were updated a decade ago, he added.
At that time, the board added the fiduciary definition to the code, and was beaten up by the securities industry, he said.
“We were out front” then, he said, acknowledging that upgrading standards is a difficult and gradual process.