Our Code and Standards Moves the Financial Planning Profession Forward

Tomorrow represents a significant anniversary for CFP Board, as it officially marks two years since our updated Code of Ethics and Standards of Conduct (Code and Standards) became effective.

On October 1, 2019 CFP? professionals all around the U.S. transitioned to the new Code and Standards that outlines the ethical and practice standards for CERTIFIED FINANCIAL PLANNER? professionals.

This milestone comes at a time when the financial advice industry has placed a renewed focus on what it means to call yourself a financial planner.

At the core of what we do , the Code and Standards are the commitment that all CFP? professionals make to CFP Board to uphold the principles of honesty, integrity, competence, diligence and confidentiality.

As a part of adhering to the Code and Standards, CFP? professionals also commit to CFP Board to act as a fiduciary when providing financial advice to a client. This means they have agreed to put their clients’ best interests first so they can provide them with confidence today and a secure tomorrow.

A consumer should look for a financial advisor who makes this commitment directly to them. This means obtaining a written engagement, including with a CFP? professional, that requires the advisor to have a fiduciary obligation.

We take great pride in establishing and upholding ethical standards for more than 90,000 CFP? professionals. We live and breathe this work every day. That is why we believe the Code and Standards directly benefits and protects the public. It provides standards for delivering financial planning and advances financial planning as a distinct and valuable profession.

In short, along with our competency standards , the Code and Standards establish the CFP? certification’s value to the public. ?And standards don’t mean much if they are not enforced.

Enforcing Our Code and Standards

CFP Board has a defined process for adjudicating alleged misconduct in violation of the Code and Standards. Our enforcement program includes:

• An active detective function,
• Ethics review and background checks during the initial certification and certification renewal processes,
• Ongoing disclosure requirements for CFP? professionals, and
• A process for the public to file complaints.

Since 2019 we’ve not only updated the Code and Standards, but also invested significant resources, both financially and operationally, to strengthen our ability to enforce them.

These investments, which were informed by the recommendations provided by the Independent Task Force on Enforcement , benefit financial advice-seeking Americans and reinforce the confidence and security that comes from working with a CFP? professional.

One such investment was to conduct background checks on 87,000+ CFP? professionals. CFP Board completed that work in 2020 and opened 1,266 Historical Investigations . As of September 2021, CFP Board has nearly completed those Historical Investigations and the resulting adjudications of alleged misconduct.

In cases where grounds for sanction are proven, CFP Board may impose a sanction ranging from a private censure, a public censure, a suspension, or a revocation of the right to use the CFP? marks. Many of the public sanctions in 2020 and 2021 that you have seen have included those from the Historical Investigations.

Your Input Matters

We strongly believe that our Code and Standards, and the steps CFP Board takes to enforce them, distinguishes CFP? certification from other credentials in the financial services profession. And it seems that a large majority of CFP? professionals see the benefits of the Code and Standards. For example, in The 2021 Survey of CFP? Professionals :

• 86% believe CFP Board’s Code and Standards clearly lays out their obligations to CFP Board when serving clients.
• 90% believe it is very important that CFP Board enforces the standards of CFP??certification.
• 69% believe that CFP Board’s updated enforcement policies are appropriate.
• 71% agree that CFP Board’s updated enforcement policies will provide more effective enforcement.

Our work to update and enforce the Code and Standards would not be possible without the contributions of our CFP? professionals and many others within and outside the financial planning profession. As we’ve upgraded our ethical standards and enforcement processes, we have worked to be transparent and incorporate feedback from our stakeholders. For providing your continual feedback, we thank you.

But we knew when we set out to strengthen the enforcement of the Code and Standards, that not all CFP? professionals would get behind those efforts. We continue to hear comments from some that our enforcement processes are not strong enough, and from others that we’ve gone overboard.

Although the survey indicates that a strong majority believe our recent updates have landed in the correct place, I assure you that we will continue to seek your input on ways we can better enforce our standards for years to come.

Ultimately, our vision for the enforcement program is to create more effective ways to track and address misconduct, maintaining an enforcement process that is credible to the public, while being fair to CFP? professionals who are being evaluated. That is why CFP Board, as we work towards our new strategic priorities , will continue to invest significant resources, both financially and operationally, to further strengthen enforcement of our Code and Standards in the next five years.