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CFP Board to propose new revisions to conduct standards, sets effective date

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CHICAGO - After reviewing more than 1,300 posted comments, holding eight public meetings and undergoing months of internal discussion, the CFP Board is now readying the next stage of revisions to its code of ethics and standards of conduct.

Before Dec. 25, the CFP Board will release a second round of proposed changes, it said in a statement. There will be an additional public comment period between January 2 and February 2, and it intends to issue its final version before the end of the first quarter of 2018.

Pending the outcome of the second comment period, CFP Board intends the final version to be effective January 1, 2019, it said.

“The standards were heading in the right direction,” said Deborah Fox, CEO of San Diego-based Fox Financial Planning Network, who in July attended a CFP Board public meeting in San Diego on the proposed changes. “I would expect them to look very good. I’m looking forward to seeing the next iteration.”

The first round of suggested revisions included new guidelines for providing digital advice. Another important change expanded the scope of an advisor’s fiduciary duties to a client in which planners would be bound by fiduciary duty in all work with clients, even those that fall outside planning services.

The CFP Board declined to comment on specific changes between the first version and the second. In an interview with Financial Planning, CFP Board CEO Kevin Keller said only that “the board really looked hard at the practicalities of how the proposed standards would apply to different business models,” adding that the board made “a number of changes.”

During a panel at the Schwab Impact conference in Chicago, Chairman Blaine Aikin said "there will be meaningful changes to what was proposed before.”

Aikin added that the "core principal" that CFPs must act as fiduciaries "whenever advice is involved" will be a part of the revised proposal, but declined to specify any further changes.

The revisions come after comments from individuals, organizations and firms, the board said. One of the outside recommendations was to hold another round of public comment. The initial comment period had closed August 21.

For advisors who want to compare changes between the first and second draft, the CFP Board will release an annotated version and a side-by-side comparison document by the end of 2018. A current draft of the proposed standards is on the board’s website. This version does not include the changes that will be the subject of the upcoming comment period.

When asked whether the 30-day period is too short, Aikin disagreed. "Given how thorough this process has been over the last two years, there wasn't anything that just blew us away," he said. "There wasn't any 'wow, we never thought of that.' We feel like a 30-day period should be ample."

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