Category Archives: Fiduciary

Financial Planning Coalition Responds to Securities and Exchange Commission’s Package of Rule Proposals

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) –submitted three letters addressing the Securities and Exchange Commission’s  (SEC) proposed rule “Regulation Best Interest”; the proposed IA Interpretive Guidance; and the proposed Form CRS Relationship Summary.

This package of proposals provides the SEC the long-awaited opportunity to raise the standard of conduct applicable to broker-dealers who provide personalized investment advice; reaffirm the fiduciary obligation of investment advisers; enhance investor understanding by requiring both broker-dealers and investment advisers to deliver a relationship summary document to retail investors; and reduce investor confusion by restricting the use of certain titles by broker-dealers.

Faced with growing responsibility for their own investment decisions and an increasingly complex universe of financial products and services, Americans today must depend on competent and ethical advisors to help make decisions critical to their financial security. When they seek financial advice, however, they face a marketplace in which it is virtually impossible to distinguish a salesperson from an advisor, or between those advisors who are legally obligated to provide advice in the investor’s best interest versus those who are not. The Coalition supports the goal of helping investors understand the type of financial professional they are dealing with and what they should expect from their relationship.

In the letters submitted to the SEC, the Coalition expresses its concerns regarding the package of rule proposals, and lays out its recommendations to strengthen the proposed rules, including encouraging the Commission to follow the lead of the CFP Board in revising its Standards to extend the fiduciary obligation of a CFP® professional to all Financial Advice.

The Coalition holds a longstanding interest in this issue and in numerous comment letters over the last several years has expressed its support for a fiduciary standard of care for all financial professionals who offer personalized investment advice to retail investors. A clear fiduciary standard equally applicable to all financial professionals who provide personalized investment advice, including broker-dealers, would help clarify the  investment decisions Americans face every day.

Financial Planning Coalition Statement Following SEC Meeting on Fiduciary Standards

Washington, D.C., April 18, 2018 – 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 today’s Securities and Exchange Committee meeting on fiduciary standards.

“The proposals – as discussed by the SEC – appear to be a step forward for investors.

The Financial Planning Coalition looks forward to thoroughly reviewing each of the three proposals in great detail and providing input to the commission informed by CFP Board’s recently approved new Standards of Conduct and Code of Ethics.

We appreciate the opportunity to comment on these proposals and will make recommendations to strengthen them in keeping with what consumers expect and deserve – a fiduciary standard requiring financial professionals to put their clients’ interest first when providing financial advice.”

Financial Planning Coalition Statement on SEC Fiduciary Standards Meeting

Washington, D.C., April 18, 2018 – 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 advance of the Securities and Exchange Commission meeting on fiduciary standards.

“Today, the SEC will finally have a meeting that should have happened nearly eight years ago when Congress explicitly authorized the SEC to enact a fiduciary rule under the Dodd-Frank Act. We expect to hear the Commissioners express support for this important consumer protection and that the proposed rule will have meaningful language providing American investors a fiduciary standard of care. We look forward to reviewing the SEC’s proposal and to submitting our comments as part of the public comment process.”

Financial Planning Coalition Urges Trump Administration to Prioritize Fiduciary Standard Rule

Washington, D.C., February 2, 2018 – 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 surrounding President Trump’s State of the Union Address and the one-year anniversary of his presidential memorandum ordering a review of the Department of Labor’s (DOL) fiduciary rule.

“President Trump lauded the growth of Americans’ 401(k)s and pensions during his first State of the Union Address. But while many Americans’ retirement savings continue to thrive, it is imperative that these financial gains are preserved for the long term. The American people deserve to get a good deal when they seek advice for retirement savings. The Coalition calls on the President and his regulatory agencies to prioritize full implementation of a fiduciary standard of care to prevent conflicted financial advice and protect Americans’ hard-earned savings.”

One year ago, the President submitted a presidential memorandum to the Labor Secretary to review its fiduciary rule. Since then, the DOL has delayed the full implementation of the rule – which already addresses concerns raised by lawmakers, regulators, financial industry organizations, public interest groups and consumers – and unnecessarily jeopardizes the financial well-being of millions of Americans, who lose billions of dollars each year because of conflicts of interest. Continued delay of this important measure denies millions of people the retirement security that they deserve.

While the Coalition is pleased that the Securities and Exchange Commission (SEC) is pursuing a fiduciary standard for all investment advice, it is important that any rule proposed by the SEC not replace but complement the DOL rule.

The Coalition believes that requiring advisers to work in retirement investors’ best interest is an essential and long overdue reform. The Coalition strongly urges the Department of Labor to continue its work toward full implementation of investment advice standards that can support American businesses and consumers as soon as possible.

Financial Planning Coalition Statement on Department of Labor’s Decision to Delay Enforcement Provisions of Fiduciary Rule

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 related to today’s announcement from the Department of Labor delaying enforcement provisions of its fiduciary rule until July 2019:

“The Coalition believes that requiring advisers to work in retirement investors’ best interest is an essential and long overdue reform. Delaying enforcement of the fiduciary rule – which already addresses concerns raised by lawmakers, regulators, financial industry organizations, public interest groups and consumers – unnecessarily derails that reform and jeopardizes the financial well-being of millions of American savers, who lose billions of dollars each year because of conflicts of interest. The Coalition strongly urges the Department to continue its work toward full implementation of investment-advice standards that can support businesses and consumers as soon as possible.”

Financial Planning Coalition Statement on Court Decision in Support of DOL Fiduciary Rule

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 on the recent court decision in support of the U.S. Department of Labor’s (DOL) ability to issue a Fiduciary Rule:

“Today the American retirement saver won an important victory in a North Texas courtroom as Chief Judge Barbara Lynn supported the Department of Labor’s position that it had the authority to issue a revised fiduciary rule that will protect millions of Americans’ hard-earned retirement assets.

In rendering her 81-page decision, Judge Lynn relied, in part, on the experiences of CFP® professionals operating under a fiduciary standard when providing financial planning services similar to that in the Best Interest Contract Exemption (BICE) as cited in the Financial Planning Coalition’s (FPC) amicus brief:

“Here, the input of amicus Financial Planning Coalition (“FPC”) is pertinent. Although FPC heard the same concerns regarding compensation when it implemented similar standards to BICE in 2008, commission-based compensation has survived, and FPC’s financial professionals continue “to serve middle-income investors using all types of [] compensation models and other innovative methods.”

The Court also finds that the conditions to qualify for BICE are reasonable. FPC notes that its almost 80,000 members have since 2008 successfully operated under a regime similar to that in BICE, including a fiduciary standard, a written contract, disclosure of certain fees, costs, and conflicts of interest, prudency standards, and policies to mitigate conflicts.

The Financial Planning Coalition is gratified that the DOL prevailed in this case. We will continue to encourage the Trump Administration and Congress to avoid delay of the rule’s implementation so that the American retirement saver will benefit from investment advice in his or her best interest.”

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