What Is a Certified Financial Fiduciary (CFF)?

A certified financial fiduciary (CFF) is a designation for financial professionals who are committed to acting in their clients’ best interests, adhering to fiduciary duty. The fiduciary financial advisor certification aims to distinguish advisors who prioritize transparency and ethical conduct in their practices. CFF designees are required to complete specific educational courses and adhere to ongoing ethical standards, which help demonstrate their dedication to fiduciary responsibility. This certification is particularly relevant for consumers looking to work with advisors who are legally obligated to make decisions that are aligned with the client’s best financial interests.

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Certified Financial Fiduciary (CFF) Basics

First, it helps to understand a what a fiduciary does. In short, a fiduciary is ethically bound to act in their clients’ best interests. They also should be transparent about any fees they charge for their services.

Several years ago, the Department of Labor required more financial professionals, particularly those who work on retirement planning, to act as fiduciaries. Those rules have since rolled back, but the National Association of Certified Financial Fiduciaries (NACFF) cites them as the reason it created the CFF in 2018. The organization’s website argues that no matter what government standards prevail, many customers expect advisors to meet the fiduciary standard. The certificate can help professionals establish their practices as that operate by this standard.

CFF candidates mostly are CPAs, financial advisors and brokers. However, with enough relevant work experience, education or a combination of both, anyone who advises clients on financial matters is eligible.

Requirements for Becoming a CFF

The NACFF is a for-profit organization and CFF candidates pay for their training and accreditation. While the organization may deny any application, just about any financial professional will be eligible.

To become a certified financial fiduciary, applicants must have either 10 years of relevant work experience or a bachelor’s or graduate degree plus five years’ experience. They also must pass a criminal background check.

Once accepted, candidates must complete a one-day training course in person or online. They also must pass an 80-question, multiple-choice exam with a score of 75% or higher. Once certified, CFFs complete 10 hours of continuing education annually and must comply with NACFF’s ethical standards.

The cost of the CFF class, exam and certificate is either $1,695 or $1,895, depending on whether you enroll in an online or in-person class. There’s also a $250, non-refundable application fee.

Certified Financial Fiduciary (CFF) vs. Non-Fiduciary Advisors

Let’s imagine you are deciding whether to work with a financial advisor who has CFF certification or one that does not. What’s the difference between them?

Some financial professionals, including registered representatives of broker-dealers, were previously only required to make recommendations to clients that were “suitable,” but not necessarily in their best interests, as a fiduciary financial advisor is required.

However, Regulation Best Interest (Reg BI), introduced by the SEC in 2019, established a new standard of conduct for broker-dealers. Under Reg BI, broker-dealers must act in the “best interest” of retail customers when making recommendations, avoiding conflicts of interest and ensuring transparency. This regulation aims to enhance the suitability standard.

Compared to the fiduciary standard – which legally binds fiduciaries to act solely for their clients’ benefit –Reg BI represents a middle ground, providing stronger client protection than suitability but not as stringent as the fiduciary standard. Reg BI emerged partly in response to calls for greater accountability within financial services, following issues where clients received recommendations that were more beneficial to advisors than to the clients themselves. Its goal is to offer increased investor protection without applying a full fiduciary duty to broker-dealers.

The CFF title does tell clients that this advisor embraces the higher fiduciary standard. However, there are many financial advisors who are fiduciaries and have no extra certifications. Generally, if an advisor is registered with the Securities and Exchange Commission (SEC), they are a fiduciary. In these cases, there’s no real difference between a CFF’s standards and practices and a non-CFF advisor’s.

By itself, the CFF does not show an advisor has extensive financial training. Note that a professional may earn a CFF for a fee, a day of study and passing an exam. CFFs may well have deep experience and be highly ethical professionals. But there are many financial advisors without this certification who embrace the fiduciary standard and know what it demands of them.

Bottom Line

A CFF certification is a good sign if you want financial advice that puts your interests first. The holder likely is an established professional who has an expressed commitment to the fiduciary standard. This means they shouldn’t be working for commissions or using your investments and gains to pay themselves.

That said, no certification assures competence or ethics. The fiduciary standard is based on trust, not hard and fast laws. So what matters most is to work with financial professionals who come with strong referrals or practices you know well. Whether an advisor is a CFF or not, make sure it’s a good personal fit before you make a commitment.

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