At a critical juncture for the CFP Board, longtime Vanguard executive Jack Brod is poised to lead the organization's board of directors.
Brod will take the reins just after the CFP Board's updated code of ethics and standards of conduct takes effect in 2020, mandating that CFP holders act as fiduciaries at all times when providing financial advice. It will be "a pivotal time for CFP professionals and the entire profession," said Brod, who has held the CFP certificate since 1991.
In a statement, Brod cites the CFP Board's mission of promoting the certificate it administers as the gold standard of financial advice, lauding its "high standards for the delivery of competent and ethical financial planning and advice."
"And we are now setting the bar even higher with the requirement that all CFP professionals be held to a fiduciary standard when providing financial advice," Brod says. "The public can be confident that working with a CFP professional on a financial plan and providing advice will help them prepare for both their present and future financial situation."
-
The revised code of conduct will broaden fiduciary responsibilities for planners, but critics say the framework falls short on disclosures and conflicts.
March 29 -
Creation of the blue-ribbon body draws praise and confusion from CFPs who question its utility.
June 28 -
The new wave of advertising will highlight the emotional benefits of having a financial plan. Some CFPs have grumbled about funding previous advertising initiatives with their certificant fees.
June 29
Brod was not immediately available for an interview.
The CFP Board's long-running effort to update its code of ethics and standards has drawn sharp criticism from some quarters, including hard-line fiduciary advocates who have argued that the standards don't go far enough. Specifically, some critics claim the provision requiring CFPs to act in their clients' best interest when providing financial advice seems to accommodate the commission-based model favored by the brokerage sector, whose ranks
The CFP Board, for its part, has said that it designed the new standard so as not to favor or punish any specific business model.
The new standards will take effect October 2019.
Apart from the debate over
Brod's tenure as chairman of the board will begin just after the standards have taken effect, and his statement suggests that they will be among the most significant issues the CFP Board deals with that year.
That raises the specter of additional disciplinary actions when CFP holders run afoul of the board's fiduciary standard. As of this writing, two of the five open positions on the CFP Board website's
"CFP [Board's] priority should be compliance," says Knut Rostad, president of the Institute for the Fiduciary Standard, who has been critical of the board's new standards for not insisting on a strict fiduciary obligation at all times. "Brokers with no experience, training or guidance will fail to meet a fiduciary standard."
Brod entered the planning profession in the 1980s, and rose to become a regional leader in the RIA shop at Price Waterhouse, according to the CFP Board. He jumped to Vanguard in 1995, where he helped launch an advisory business catering to high-net-worth retail investors. Before his retirement, Brod headed up Vanguard's U.S. Sales and Distribution unit, serving RIAs, brokers and banks.
Brod will succeed Susan John, who the board elected to serve as chair in 2019, following the conclusion of the term of the board's current chair, Richard Salmen.
Broad and John are both current members of the CFP Board's board of directors. In a statement, Salmen praised Brod as "a proven leader whose deep knowledge and passion for the financial planning profession have greatly contributed to the work of the board over the last year."
