Author Archives: Merrijoy Vicente

Delay on Fiduciary Just as Harmful as the Actual Harm

Financial Planning Coalition Responds to SEC official’s suggestion that it may not have enough data to support a fiduciary rulemaking

Washington, D.C. – The Financial Planning Coalition – comprising Certified Financial Planner Board of Standards, Inc. (CFP Board), the Financial Planning Association® (FPA®) and the National Association of Personal Financial Advisors (NAPFA) – issued the following statement in response to an SEC official’s suggestion that it may not have enough data to support fiduciary rulemaking:

“The Financial Planning Coalition has consistently urged the Securities and Exchange Commission (SEC) to move forward with a rulemaking requiring broker-dealers providing retail investment advice to adhere to a fiduciary standard of care – just as investment advisers are required to do under the Investment Adviser Act of 1940.

“This requirement is not only long overdue, but it is consistent with Section 913 of the Dodd-Frank Wall Street Reform and Investor Protection Act, which gave the SEC the authority to take this action.

“We fully support the SEC having sufficient information at its disposal to evaluate the need for such a rule. It is, however, disappointing to hear from a senior SEC official that the information the SEC has collected to date is ‘less than staff thought it was going to be.’

“There is convincing evidence in the existing record that demonstrates the need for this important rulemaking. In response to some concern that harm to consumers was not sufficiently supported in the record, the Financial Planning Coalition – and several other organizations – jointly submitted a supplemental letter to the SEC highlighting the evidence of harm in response to the SEC Request for Information.

“The information, the evidence and the data is there. It is time to move forward. The longer the SEC delays, the more harm will be done.”

Financial Planning Coalition Urges Passage of Legislation to Improve Investment Adviser Oversight and Better Protect Investors

Bill Would Increase Investment Adviser Examinations

Washington, D.C. – The Financial Planning Coalition – comprised of Certified Financial Planner Board of Standards, Inc. (CFP Board), the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA) – urges Congress to enact the Investment Adviser Examination Improvement Act of 2013, introduced by Representative Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee with Representative John Delaney (D-MD) as an original co-sponsor.

Authorizing the U.S. Securities and Exchange Commission to collect user fees from advisers to increase examinations is a pragmatic and cost-effective solution to a significant investor protection problem. It will have no financial impact on taxpayers or the federal deficit and is supported by the investment adviser industry. Increasing adviser examinations is good for both consumers and advisers.

The Coalition plans to work with Reps. Waters and Delaney to support this needed piece of investor protection legislation and encourages other members of Congress to enthusiastically endorse this important measure.

Investment News: RIAs should be forced to hire outside examiners: Gallagher

Mark Schoeff of InvestmentNews reports that SEC official wants registered investment advisers to be forced to hire third-party contractors to conduct examinations, increasing the oversight of advisers.

Excerpt: Securities and Exchange Commission member Daniel Gallagher wants registered investment advisers to be forced to hire third-party contractors to conduct examinations.

In remarks at the Financial Industry Regulatory Authority Inc.’s annual conference in Washington, Mr. Gallagher recommended that the SEC write a regulation that would require advisers to hire an examiner to review their operations.

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Huffington Post: There Is a Future of Finance (And It’s Called Fiduciary Capitalism)

John D. Rogers, President and CEO of the CFA Institute discusses how the financial industry and investors would benefit if “an era of fiduciary capitalism emerges.”

Excerpt: Earlier this week, over 1,800 investment professionals took time out to visit Seattle for CFA Institute’s 67th Annual Conference. This was an important opportunity to join an initiative that is about the future of finance and shaping an industry that better serves society. Education has a crucial role to play in helping to restore to financial intermediaries a greater sense of social purpose, and that’s why CFA Institute and other professional organizations exist. A new mindset, one we could call fiduciary capitalism, is worth considering. The leaders here will likely include institutional investors – pension funds, endowments, foundations and sovereign wealth funds – as well as early adopters in the fund management industry. Based on a duty of care and loyalty and the obligation to place the needs of their beneficiaries above all other considerations, these investors share an agenda.

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Financial Advisor: SEC’s Budget Fails To Protect Investors, White Says

Ted Knutson of Financial Advisor reports that the SEC is not providing investors with “sufficient protection” against dishonest advisors because of budget shortfalls.

Excerpt: The Securities and Exchange Commission is not providing investors with “sufficient protection” against dishonest advisors because of budget shortfalls, SEC Chairman Mary Jo White told Congress today.

Noting that the SEC only has 19 examiners per trillion dollars in investment advisor assets under management, White appealed for money to hire 250 advisor examiners. The examiners are needed for better oversight of advisors, whom she said consumers are increasingly relying upon to deal with securities markets and retirement planning.

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Barron’s: A Uniform Standard of Care

John G. Taft, CEO of RBC Wealth Management U.S., discusses the need to extend a uniform fiduciary standard of care across the financial planning profession.

Excerpt: There is a regulatory reform that will enable the wealth-management industry to better serve the investing public. It is a simple way to ensure that individual consumers of financial advice receive the same high level of regulatory protection — no matter which firm they walk into, which advisor they work with, what kind of advice they receive, or how they pay for it, and without compromising their access to products or services or otherwise limiting their investing choices.

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