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CFP Board of Standards Concurs: “Zero” Conflicts of Interest is an Impossible Claim

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In a recent article on AdvisorOne, Rex Staples, CFP Board of Standards Inc., wrote that HighTower CEO Elliot Weissbluth’s claim that his company has “zero conflicts of interest” is an “incredulous” suggestion. “I agree with author Knut Rostad’s premise and conclusion…” he writes. “It is simply inappropriate for a CFP® professional to say to a client that he/she has zero conflicts of interest.”

Staples added that there is no such thing as a “technical conflict”, suggesting that perhaps Weissbluth was referring to the legal distinction between material conflicts and those conflicts not deemed to be material. However, even if that was the case, his claim of “zero” conflicts would still be false. He then goes on to discuss the legal and regulatory background regarding material conflicts of interest.

The Institute for the Fiduciary Standard applauds CFP Board for giving this issue the thoughtful treatment it deserves.

Dan Moisand

 

Dan Moisand is a nationally recognized fiduciary fee-only financial planner, an Institute Real Fiduciary™ Advisor and Chair-elect of the CFP Board.

The Institute has enshrined the ‘Moisand Rule’ on fiduciary practices. It is basic and is more important today than ever: “You have to avoid conflicts. If I avoid a conflict, I don’t worry about it.”

Watch the video of Moisand speaking here.

Bob Veres

 

Bob Veres is a long term observer of financial planning. His Newsletter, “Inside information” Is a staple of leading planners. In the May edition he writes about fiduciary and the Institute.

"But a much bigger point is that the fiduciary standard—as Knut Rostad of the Institute for the Fiduciary Standard has pointed out—has been determined by the Supreme Court (1963 ruling) to be at the very heart of the Investment Advisers Act of 1940. It is the foundation of what it means to be an RIA registered with the SEC instead of a tipster or a tout."

- Bob Veres, Parting Thoughts ... The SEC's Own Compliance Culture