A Step In The Right Direction: NAPFA Submits Comments on CFP Board of Standards' Second Exposure Draft Code of Ethics

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The National Association of Personal Financial Advisors (NAPFA) offers brief opinions on the Second Exposure Draft of the CFP Code of Ethics.

The National Association of Personal Financial Advisors (NAPFA) offers brief opinions on the Second Exposure Draft of the CFP Code of Ethics.

Since 1983, the National Association of Personal Financial Advisors (NAPFA) has been critical of the financial services industry for the lack of support of a fiduciary standard that will protect investors. It appears, however, NAPFA is no longer the only voice of reason with regard to this important issue. We are very pleased the CFP Board of Standards is moving to raise the professional standards.

When the CFP Board of Standards released their First Exposure Draft Code of Ethics in September 2006, NAPFA urged the Board to carefully reexamine their position on four important fronts:

  •     The optional fiduciary standard for a CFP certificant
  •     Changes to the definition of "Fee-Only"
  •     The aspirational nature of the code
  •     The terminology reflecting a suitability standard rather than a fiduciary standard

Based on the March 9, 2007 release of the Second Exposure Draft Code of Ethics, it appears the CFP Board of Standards is taking the right steps to assure the interests of the consumer are protected.

"It appears the CFP Board of Standards has received effective feedback from NAPFA and other like-minded industry organizations and professionals," said NAPFA National Chair Dick Bellmer. "Based on an initial review of the Second Exposure Draft, they have addressed NAPFA's concerns regarding the definition of 'fee-only', tackled the aspirational nature of the code, and have clearly defined 'fiduciary.'"

NAPFA will provide more detailed comments in the coming week as they further analyze the Second Exposure Draft. If you are interested in learning more about NAPFA's position on this important debate, please contact Benjamin Lewis of Perception, Inc. at (301) 963-7555.

About NAPFA

Since 1983, The National Association of Personal Financial Advisors (NAPFA) has provided Fee-Only financial planners across the country with some of the strictest guidelines possible for professional competency, comprehensive financial planning, and Fee-Only compensation. With more than 1,000 members across the country, NAPFA has become the leading professional association in the United States dedicated to the advancement of Fee-Only financial planning.

For more information on NAPFA, please visit http://www.napfa.org.

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Benjamin Lewis
NAPFA
301-963-7555
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