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‘US making a mockery of CFP’

UK financial planners fear that American proposals to change standards will tarnish qualification

Certified financial planners fear that the reputation of CFP status could be torpedoed by US members’ attempts to remove their fiduciary duty of care to clients.

The US board of standards is proposing changes to the CFP code of ethics and professional responsibility and financial planning practice standards which would effectively enable financial planners to opt out of their duty of fiduciary care when advising clients.

The proposal states that the duty of care would apply “unless the parties specify in their agreement a different legal standard governing these actions”.

Although no such exemption will be introduced in the UK, the move has provoked uproar from UK financial planners who say the CFP brand, designed to represent an international standard of quality, will be tarnished.

Institute of Financial Planning chief executive Nick Cann says: “This proposal by the US makes a mockery of the CFP qualification. Luckily, regulation in the UK means that this would not be able to happen.”

Financial Planning Association chairman James Barnash says: “You do not see doctors trying to waive their Hippocratic oath to patients. The SEC prohibits investment advisers from adding hedge clauses to their client contracts waiving their fiduciary duty, yet here, the CFP board seems to be saying that the act of putting their client’s interests first should be optional for the professional planner.”

Syndaxi managing director Robert Reid says: “I cannot see how we can say there is an international standard if this is the case. It seems like they want to try and dilute the standard in order to get more members. We are extremely disappointed at the debacle in the US.”

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