What follows is a copy of my recent letter to the CFP Board (Certified Financial Planner Board) on Fiduciary Responsibility. The board has proposed a watered down version of Fiduciary responsibility that effectively biforcates CFP's into two classes - Fiduciaries and non-fiduciaries, but it will be nearly impossible to tell one from the other in terms of what they say and how they market themselves, what a joke.
My letter:
Dear CFP Board,
I am writing to let you know that I am fervently opposed to the new standard regarding Fiduciary Responsibility.
I believe that if financial planners want to improve the profession we need to be held to a higher standard and that standard should be a Fiduciary one. The new standards create a situation where one CFP is held to one standard and another a different standard - this effectively makes the CFP designation worthless. It won't be long before the media figures this out and all the positive press will turn negative.
All CFP's should be held to a Fiduciary Standard and the term Fiduciary should be in the standards. How can you call yourself a financial planner and not ALWAYS put your clients' best interest first? If you can't practice financial planning and do it in a fiduciary manner, you should not be allowed to practice.
Implementing this new standard will prove a massive mistake and confuse people even more. I wonder what is happening to a board that is supposed to be looking out for the public.
Your mission states "The mission of Certified Financial Planner Board of Standards, Inc. (CFP Board) is to help people benefit from competent, professional and ethical financial planning." You are not accomplishing your mission with the standards change, you can only accomplish this by REQUIRING CFP holders to act as Fiduciaries in all engagements.
There is a good possibility I will give up my CFP designation out of protest if this standard goes through, and while you may think that one guy giving up his mark will not be worthy of a mention in the press you would be very wrong. The brokerage firms and insurance companies may control a lot of things, but the one thing they don't control is the media and I guarantee you that implementing your standards will represent the beginning of the end of the CFP - the decline of the CFP will begin if you pass these standards, how could it not - you are lowering the standards.
It's amazing that congress added a Fiduciary provision in the PPA, but the CFP board can't seem to the same thing, this is very sad and I beg of you to reconsider.
Warm regards,
Scott Dauenhauer, CFP, MSFP
