Standard Clarifies Role of a Fiduciary Adviser

For Release: September 26, 2008 

DENVER, Colo.… The Financial Planning Association^® (FPA^®) announced today a Standard of Care for financial planning professionals. The Standard of Care clarifies the role of a fiduciary adviser subject to the Investment Advisers Act of 1940 and when providing material elements of financial planning services under CFP Board's recently revised Standards of Professional Conduct.

The Standard of Care reads:

All financial planning services will be delivered in accordance with the following standard of care: • Put the client's best interests first;

• Act with due care and in utmost good faith;
• Do not mislead clients;
• Provide full and fair disclosure of all material facts; and
• Disclose and fairly manage all material conflicts of interest.
  

"It serves as a plain language description of a fiduciary role in a financial planning engagement," said Mark Johannessen, CFP^®, president of FPA. "In these turbulent times when consumers are often confused and frustrated in their search for ethical, objective, client-centered advice in the marketplace, the Standard of Care offers a clear and succinct guidepost to the public as to what it should expect from a financial planning professional." The Standard of Care was adopted by the FPA Board of Directors after receiving input earlier this year from members in response to recommendations made by the FPA Fiduciary Task Force in 2007.

"The Standard of Care reflects FPA's belief that those of us delivering financial planning services are fiduciaries, regardless of our business model, method of compensation, or professional designations," continued Johannessen.

Earlier this year, FPA created a Best Practices Task Force that is developing additional guidance and interpretation for members on how to live to a fiduciary standard in a variety of financial planning situations. Task force recommendations are expected in December, prior to the effective date of CFP Board's Rules of Professional Conduct on January 1, 2009. Since FPA's creation in 2000, the Association's Code of Ethics has mirrored CFP Board's Standards of Professional Conduct. All FPA financial planning members are required as a condition of membership to ascribe to the FPA Code of Ethics. FPA's bylaws were updated in June 2008 to reflect the changes in CFP Board's Rules of Professional Conduct.

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