Author Archives: Carolyn Sofman

Coalition Statement on Appropriators’ Letter to OMB Regarding DOL Fiduciary Rule

The Financial Planning Coalition issued the following statement after a letter from the Chairmen of the House and Senate Appropriations Subcommittees on Financial Services and General Government was sent to Office of Management and Budget (OMB) Director Shaun Donovan, expressing concerns over the Department of Labor’s (DOL) fiduciary rule proposal:

“We continue to urge the OMB to thoroughly and swiftly review the DOL’s proposed fiduciary rule and to resist any attempts by policymakers and industry participants to halt or delay this process based on mere presumptions about a yet-to-be-released rule. Premature attempts to keep the DOL’s proposed update of a 40 year-old rule from being subject to public review and comment should be opposed. While the Coalition cannot support the substance of a rule it has not seen any more than opponents can condemn it, we support an open and transparent process, a position anyone concerned about the security of Americans’ retirement savings should hold. We look forward to reviewing the rule when it is released for public review and comment by all stakeholders.”

Coalition Statement on Wagner Fiduciary Bill

The Financial Planning Coalition issued the following statement after Rep. Ann Wagner’s (R-MO) reintroduction of legislation that would delay, or even prevent the U.S. Securities and Exchange Commission (SEC) and the Department of Labor (DOL) from developing fiduciary rules crucial to investor protection:

“Rep. Wagner’s legislation, the Retail Investor Protection Act, is an investor protection bill in name only. The Financial Planning Coalition helped prevent this legislation from becoming law when it was first introduced and continues to oppose it now and in the future. This bill, if enacted, would leave American investors vulnerable to potential abuses and would substantially impede or even prevent the SEC from proceeding with Congressionally authorized fiduciary rulemaking. All investors deserve to receive investment advice that is based on their best interests, and this legislation would require the Commission to consider less adequate and less effective alternatives. The bill would also slow or effectively prohibit the DOL from proceeding with its proposed fiduciary rulemaking for financial professionals who provide investment advice to retirement savers. This cynical attempt to undermine these critical investor protection efforts should be opposed.”

Coalition Statement on White House announcement on DOL Fiduciary Proposal

The Financial Planning Coalition issued the following statement regarding the White House’s announcement that the Department of Labor’s (DOL) long-anticipated proposed rule to amend the definition of “fiduciary” under the Employee Retirement Income Security Act (ERISA) has been sent to the Office of Management and Budget (OMB) for review:

“Today’s White House announcement in support of the Department of Labor’s fiduciary rule proposal is a strong sign that investor protection is a priority for this Administration. Given the significant changes to retirement saving since the passage of ERISA, it is entirely appropriate for the DOL to reevaluate the 40 year-old rule defining the fiduciary standard for those financial professionals providing investment advice to retirement savers. We look forward to reviewing the department’s proposal, and urge OMB to complete its review of the rule in a timely fashion. Saving for a decent retirement is a fundamental part of life for every American. Those who work hard and save for the future deserve financial professionals whose primary concern is the best interests of their clients and not their bottom line.”

Coalition Statement on President Obama’s Proposed FY 2016 Budget

The Financial Planning Coalition issued the following statement regarding President Obama’s FY 2016 budget proposal:

“The Financial Planning Coalition is pleased that President Obama addresses the current and persistent underfunding of the SEC in his 2016 budget proposal, once again requesting $1.7 billion. While Congress modestly increased the SEC’s budget for 2015, the agency’s funding remains woefully inadequate, impeding its oversight and examination of investment advisers. We urge lawmakers to support greater investor protection by adequately funding the SEC.”

Financial Planning Coalition Statement on Hensarling and Garrett User Fees Letter

The Financial Planning Coalition issued the following statement regarding the letter from House Financial Services Committee Chairman Jeb Hensarling (R-TX)and Rep. Scott Garrett (R-NJ), chairman of the committee’s capital markets subcommittee, to Securities and Exchange Commission (SEC) Chair Mary Jo White regarding the costs of proposed user fees to increase investment advisor oversight:

“While we are pleased that Chairmen Hensarling and Garrett recognize there is a problem resulting from the lack of investment advisor examinations, we strongly disagree that merely asking the SEC to reallocate its stretched and inadequate resources or outsourcing examinations to third parties is the solution. Chairmen Hensarling and Garrett’s recent letter opposing user fees ignores a well-documented Boston Consulting Group economic analysis that shows that user fees are the most cost-effective solution to increasing examinations. Current legislation authorizing the SEC to assess user fees is supported by the very industry it would affect, has no impact on the American taxpayer and is scalable to address any small business concerns.

“In Washington there is a tendency to make complex what should be simple. The simplest and most cost-effective solution that will in fact protect investors is to enable the SEC – the expert agency on advisor regulations – to increase examinations with very strong support of advisors and at no cost to taxpayers. We will continue to work to encourage the 114th Congress to embrace the user fee solution.”

Ahead of SEC Chair’s Expected Announcement on Fiduciary Standard Rulemaking, Pro-Fiduciary Groups Advocate for Economic Analysis that Supports Strong, Pro-Investor Rule

A group of organizations advocating for the Securities and Exchange Commission (SEC) to move forward with a rulemaking that would extend the fiduciary standard to broker-dealers providing retail investment advice have called on SEC Chair Mary Jo White to ensure that the Commission’s economic analysis will be “well-reasoned” and “lay the groundwork for a strong, pro-investor policy.”

The letter, which outlines key elements the economic analysis must include to achieve that goal, is signed by the Consumer Federation of America, Fund Democracy, Inc., Certified Financial Planner Board of Standards, the Financial Planning Association and the National Association of Personal Financial Advisors.

A copy of the letter, which was delivered to the SEC on Friday, November 21, can be accessed here.

In releasing the letter, the group also made this statement:

“We have all long advocated for a uniform fiduciary standard that would, consistent with Section 913 of the Dodd-Frank Act, apply to broker-dealers when they offer personalized investment advice to retail investors. With this letter, we want to make it perfectly clear that we believe a thorough, well-reasoned economic analysis will offer strong support for rulemaking.

“Past actions – and inaction – by the Commission have permitted broker-dealers to misrepresent themselves to the public as advisers without requiring them to meet the fiduciary standard that is appropriate to that role, and unsuspecting investors have been harmed as a result.

“It is time for the SEC to develop a rational, pro-investor policy for the regulation of financial professionals. Toward that end, we urge the Commission to follow the staff recommendation made nearly four years ago and move forward with a rulemaking.

“American Investors deserve to have their interests put first and adoption of a uniform fiduciary standard would immeasurably improve investor protection. Investors should not have to wait any longer to get the protection they expect and deserve.”