The Certified Financial Planner (CFP®) Board is becoming more proactive in its recommendations to the SEC. Its latest letter says that clients need more information about advisors to be able to choose the right advisor. And they need this information to be published in a language they can understand.
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The disclosures particularly pertain to conflicts of interest, fees, an advisor’s history, and how the advisor is registered and licensed. The purpose of these disclosures is to help clients make more informed decisions about advisors who best fit their needs and what they can expect from those relationships.
In today’s world, marketing messages can be confusing and clients can end up in relationships where their expectations based on the marketing message are not fulfilled. In the CFP® Board’s view, these disclosures accompanied by universal standards for fiduciary care would add clarity
for clients during their advisor search. Since a CFP® Board survey says 67% of clients already have realized they will have to be responsible for their own financial futures, the ability to have more complete information will better equip them to find the support they need.