The CFP Board has begun to enforce its updated Code of Ethics and Standards of Conduct (“Code of Ethics and Standards”) that went into effect on October 1, 2019. The new Code of Ethics and Standards is the culmination of five years of work by the CFP Board to modernize the required standards of CFP professionals and to strengthen its enforcement program. The CFP Board also adopted new Procedural Rules that update and streamline the process for enforcement matters resulting from potential violations of the Code of Ethics and Standards.

“Requiring CFP professionals to comply with our strengthened Code and Standards raises the bar for the profession and benefits consumers who make important financial decisions with the assistance of financial planners,” said the chair of the CFP Board, Jack Brod, in a public statement.

The cornerstone and primary change to the Code of Ethics and Standards relates to the responsibility of CFP professionals to act as a fiduciary in all aspects of the client relationship. Most notably, CFP professionals must act as a fiduciary when providing financial planning services and/or providing financial advice. The previous code limited that fiduciary duty to the financial planning process. This new fiduciary standard also includes a duty of loyalty, a duty of care and a duty to follow client instructions, as well as more detailed requirements for fully disclosing and managing material conflicts of interest and obtaining informed consent.

These changes are intended to send a clear message to CFP professionals that the CFP Board is beefing up its enforcement arm, and that it intends to significantly increase the nature of, and number of, enforcement matters it intends to pursue. CFP professionals who fail to comply with the new Code of Ethics and Standards will face an investigation, which could lead to any or all of the following:

  • Public or private censure
  • Up to five-year suspension of the right to use the CFP marks
  • Permanent revoked right to use CFP marks

Headquartered in Chicago, Lewitas Hyman represents CFP professionals nationwide in matters involving the CFP Board, including representation of clients under investigation by the CFP Board for potential violations of the Code of Ethics and Standards. For more information or to schedule a consultation with an attorney, contact Lewitas Hyman online or call (312) 291-4600.

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