CFP Board eNewsletter
March 2007

(Reprinted with permission)

I love libraries. As an author and journalist, I happily spend a lot of time there. I also regularly take my children to the library, where we do research for school projects. Our most recent expedition was to find out more about the Vikings, the 8th-century Nordic marauders not the Minnesota football team. My kids like the library because it has a computer corner outfitted with PlayStation terminals. (Sometimes, kids — and adults — need a less educational incentive to get them through the doors.) But the library is also a great resource for learning more about personal finance and financial planning. Read more about finding financial planning information at public libraries in this editorial from best-selling author James Geary.

Lown can cite a lot of reasons. For starters, women typically earn less than men and tend to invest more conservatively. They often interrupt their careers — and therefore their earning potential — to raise children and are less likely to take part in employer-sponsored retirement plans. They live longer on average than men and have a greater chance of falling into poverty in old age. Plus, even today, too many married women leave the finances to their husbands; when their husbands die, these women find themselves unprepared to make crucial decisions. "Women are more likely to be on their own at some time in their lives," Lown says. "They are financially more vulnerable. They need to know and understand more." Read more about financial situations women should understand.

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FTC cautions all homeowners — especially elderly and low-income individuals and those with credit problems — against borrowing from untrustworthy lenders. Several deceptive practices used by some lenders could cause you to lose your home as well as the equity you’ve already built up. Learn about the different traps some lenders set for home equity borrowers and read tips to help you avoid these situations at: www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt031.htm

NASAA warns investors against investments advertised as "IRA Approved" and promoted as being endorsed by the IRS. The IRS does not sanction retirement investments, and there is no such thing as an "IRA Approved" retirement investment. Learn more about these schemes and how to protect yourself against them at: www.nasaa.org/Investor_Education/Investor_Alerts___Tips/1691.cfm

SEC cautions investors about promissory notes marketed to the general public. While it’s common for companies to raise money by issuing promissory notes to investors willing to loan the company money, those marketed largely to the general public often turn out to be a scam. Learn more about promissory note fraud, how to avoid it and what to do if you think you’ve been a victim of this type of scam at: www.sec.gov/investor/pubs/promise.htm

Read more about these and other financial alerts.

Integrity

Objectivity

Competence

Fairness

Confidentiality

Professionalism

Diligence

These seven Principles form the basis of the ethical ideals CFP® professionals are expected to exemplify through their professional activities. Certain obligations related to those Principles – such as the duty to demonstrate fairness in disclosing compensation methods and conflicts of interest or the duty to provide only those services one is competent to provide – accompany the Principles in a more detailed set of Rules.

CFP Board recently released a proposal to change the way those Rules are organized and stated. Among the goals for the proposed changes is the desire to state CFP Board’s ethical standards in a way that financial planning clients will understand clearly. The proposal also strengthens some key standards. For example, the current rules require that CFP® professionals use "reasonable and prudent professional judgment" on behalf of the client. The proposed change will require a CFP® professional to "at all times place the interest of the client ahead of his or her own." Additionally, the rules currently require CFP® professionals to act "in the interest of the client" when providing financial planning services to a client, and the proposed changes will raise that standard to a "fiduciary" duty of care, which is partly defined as acting "in the best interest of the client."

CFP Board is currently accepting comments on the proposed changes, and we encourage anyone who has used or thought about using the services of a CFP® professional to take a look at the proposals and provide feedback. The proposed changes, along with side-by-side comparisons of CFP Board’s current and proposed rules and a brief online survey, are available for review and comment through April 25, 2007 at: www.CFP.net/aboutus/Exposure_Draft.asp

Does your planner respond promptly to your calls, e-mails or requests? Has your planner made you aware of all potential conflicts of interest? Are you involved in decisions at the appropriate times? Understanding your rights as a financial planning client will help you determine if you are receiving the quality service you deserve. Read more about tools to help you check out a financial planner’s background.

You are receiving this e-mail because you subscribed to CFP Board's eNewsletter. Periodically, CFP Board will e-mail you "It's Your Turn," which includes information about financial planning, financial planning tools and resources, consumer alerts and much more. Suggestions and feedback are welcome at mail@CFPBoard.org.