It seems the famous “fiduciary rule” has lost steam and is no longer headline news due to delays and lack of support in general. Yet we see situations every day where clients were not ethically …
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It seems the famous “fiduciary rule” has lost steam and is no longer headline news due to delays and lack of support in general. Yet we see situations every day where clients were not ethically cared for.
This strikes me as archaic in this day and age of technology and transparency. Why are consumers not demanding that their advisors practice ethical standards and put the customer’s interests first in all recommendations?
This year when I renewed my Certified Financial Planner or CFP designation, the Code of Ethics and Standards of Conduct increased.
There is now an expanded fiduciary duty that all CFPs must comply with. It is important for you to be aware of these standards as they are put into place to protect you when you work with an adviser on your financial matters.
Discussing financial matters openly was taboo just a decade ago. We are still dealing with generations of people who don’t feel comfortable sharing their monetary situation, much less their goals and dreams.
This is unfortunate since now the tables have turned and it is a requirement of the engagement to share this type of confidential information with your adviser so that he or she can act prudently on your behalf as a fiduciary. In fact, it is almost impossible for your adviser to do a good job without the whole picture, so holding back information could be detrimental to the outcome.
Don’t be afraid to ask your adviser or planner if he or she is a fiduciary if it is not already posted information and apparent in the way they advise you objectively. Here are the professional duties you should expect:
• Duty of Loyalty - A CFP professional must avoid conflicts of interest, fully disclose any material or potential conflicts and must place the interest of the client above their own interests.
• Duty of Care - A CFP professional must act with care, skill, prudence and diligence based on client goals, risk tolerance, objectives and circumstances.
• Duty to Follow Client Instructions - The terms of the client engagement must be upheld, and all reasonable, lawful and prudent directions followed.
The CFP Board of Practice Standards identifies the Code of Ethics as the following:
• Act with honesty, integrity, competence and diligence.
• Act in the client’s best interests at all times.
• Exercise due care and avoid or disclose conflicts of interest.
• Maintain confidentiality and protect client privacy.
• Uphold the Standards of Care of the CFP profession.
There is now a seven-step process to comprehensive financial planning. As the financial world becomes more complex, so should your financial plan.
We are constantly dealing with change including a new tax law for 2018, updated estate planning language, changing economic patterns including interest rates and market volatility, to name a few.
Employment agreements are more complex, and benefits are changing or being reduced or eliminated, especially for retirees.
It would be difficult for the consumer to be an expert in all of these areas simultaneously.
Therefore, it is important to find an advisor who is a CFP and a fiduciary that you can trust with your hard- earned welfare, goals and dreams. It is their job to watch out for you, so you can do what you do best.
There is no reason to fall victim to a financial scam when all of the ethics and standards of care are widely published and expected.
The CFP Board of Standards is available at www.cfp.net for more information. Keeping yourself informed will empower you to make good decisions. Encourage others, especially the elderly or the uninformed, how best to protect themselves by asking for a fiduciary.
Patricia Kummer has been a Certified Financial Planner and a fiduciary for over 30 years and is managing director for Mariner Wealth Advisors., a Registered Investment Adviser with its physical place of business in the State of Colorado. Registration of an investment adviser does not imply a certain level of skill or training. Please visit www.marinerwealthadvisors.com for more information or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Any material discussed is meant for informational purposes only and not a substitute for individual advice. The opinions are based on information and sources of information deemed to be reliable, but the author does not warrant the accuracy of the information that this opinion is based upon. Securities offered through MSEC, LLC, Member FINRA & SIPC, 5700 W. 112th St., Suite 500, Overland Park, KS 66211.
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