financial planners nationwide plan to adopt tighter
rules that, in short, disclose the best interest of
their clients in all matters while federal regulation on
the issue remains in limbo.
move, effective October 2019, will apply to 80,000
certified planners. Thatís about a fourth of financial
planners nationwide, said Charlie Fitzgerald, a CFP with
Moisand Fitzgerald Tamayo in Orlando, Fla., who serves
on the Certified Financial Planner Board of Standards.
breaks down into essentially two pieces: Duty of care,
and duty of loyalty," Fitzgerald said.
said the care standard has long been addressed by
continuing-education requirements, but the loyalty
factor holds the biggest changes.
advice falls under a suitability standard ó a sales
standard," he said. "Now thatís not good
enough ó you must put clients first and foremost in
giving your advice."
of interest will exist any time money changes hands, he
said, because planners are earning a living. But the key
is for consumers to understand their available options
through their planner and perhaps elsewhere, and know
how the planner would be paid for his or her work.
the time a client signs on the bottom line, Fitzgerald
said, "The consumer must know where the conflicts
of interest lie, understand the compensation of adviser
and their firm, what the costs might be in the
transaction or the advice, and understand clearly what
new measures could be of particular help in Central
Florida, because people who move here can keep their old
advisers from home while seeking out a local planner to
help manage their money.
who have relocated for retirement, they tend to have a
financial planner," said Colby Winslow, a CFP with
Creative Planning who is Chairman of Financial Planning
Association of Central Florida.
might keep some business with a broker thatís part of
a large national practice but seek out a local financial
planner, he said.
clients are at times targeted, Fitzgerald said, whether
itís because they have more wealth or arenít as
savvy checking out a planner.
first-time clients might be seeking financial help for a
windfall such as an inheritance: "Theyíre not yet
at retirement, maybe 15 to 25 years away, and donít
want to make a mistake," Winslow said.
will be required to tell all clients which approaches to
managing their money are in their best interest both
verbally and in writing. That goes beyond several
federal and state requirements, Fitzgerald said.
not just what the CFP professional thinks is the best,
but itís what would a "jury of his/her
peers" say about his/her financial advice," he
regulations had been drawn up by Department of Labor in
2016. Those measures were delayed when President Donald
Trump took office. Some investment companies also
challenged them in court, recently winning a ruling that
the labor department had overreached its authority; that
decision is likely to be appealed, multiple wire
Securities and Exchange Commission is expected to
propose fiduciary-responsibility regulation as well.
Information about the SEC version that has been leaked
to the news media implies that it would apply to
retirement and non-retirement accounts, would regulate
conflicts of interest and would dictate who can and
cannot call themselves a financial adviser.
remains to be seen ó itís a trend thatís been
going on for several years, and weíre saying weíre
not going to wait for the government," Fitzgerald
said. "We know itís the right thing to do. The
public needs this, so weíre doing this."
said the delay in carrying out the new rules is designed
to accommodate larger firms.
should have a few questions ready for any financial
provider, Winslow said.
what their approach is: Are they a fiduciary?" he
said. "And ask how they get compensated ó for
product, or for fees, how that happens.
what it usually comes back to: Compensation usually
drives behavior," he said.