Category Archives: Fiduciary

Financial Planning Coalition to Congress: Oppose Any Attempt to Delay DOL Fiduciary Rule

The Financial Planning Coalition sent letters to all members of the House of Representatives and all members of the Senate on November 16, urging opposition to any bill or legislative mechanism to delay the final Department of Labor (DOL) fiduciary rule:

“We urge you to reject any legislative proposal related to the DOL rulemaking – whether standalone legislation or appropriations “riders” on the omnibus funding bill – including any legislation based on a “declaration of principles” that are currently circulating in Congress. Congressional action is unnecessary and would derail, not advance, a final rule to require retirement advisors to serve their clients’ best interests.”

“Legislation based on the “declaration of principles” as proposed would weaken, not strengthen the fiduciary standard under ERISA. These principles refer only to disclosure of conflicts of interest; but are completely silent on a fundamental component of the fiduciary standard – an obligation to mitigate compensation practices and incentives that give rise to conflicts of interest. A final DOL fiduciary rule is the correct solution to ensure that advisors are truly required to serve their clients’ best interests. We urge you to reject this or any other legislative proposal – whether stand alone or in the funding bill – that will serve to delay or defeat the promulgation of a final DOL fiduciary rule.”

Coalition to Congress: Let DOL Promulgate a Final Rule to Protect Retirement Investors

The Financial Planning Coalition issued the following statement regarding the House Financial Services Committee’s vote in support of H.R. 1090, legislation designed to impede the Department of Labor’s fiduciary rulemaking:

“The need for a strengthened fiduciary rule under the Employee Retirement Income Security Act (ERISA) is long overdue. As H.R. 1090 heads to the House floor, we urge Congress not to intervene – through this bill or any other vehicle – and to let the DOL do its job and protect retirement investors.

“As recognized by 25 members of the House Financial Services Committee, the DOL is the expert agency charged with implementing fiduciary-level advice for tax-preferred retirement assets under ERISA. That fiduciary principle – wisely recognized by Congress in 1974 – is even more important in today’s retirement marketplace in which retirement investors are largely responsible for their own retirement savings.”

The Coalition sent a letter to members of the House Financial Services Committee on September 29, urging opposition to the legislation. H.R. 1090, the so-called “Retail Investor Protection Act,” does not protect retail investors. Rather, it inappropriately prohibits the DOL from adopting a rule to protect America’s retirement investors until after the Securities and Exchange Commission (SEC) issues a fiduciary rule. This would indefinitely delay or completely block adoption of a DOL fiduciary rule because the SEC is not required to issue a fiduciary rule, has yet to propose a rule – almost five years since Congress authorized it to do so – and may never do so. In contrast, the DOL, after years of study and an extensive economic analysis, has released a comprehensive proposal that would close loopholes in its 40 year-old rule and extend long overdue fiduciary advice to plans, plan beneficiaries, and IRA holders under ERISA.

Financial Planning Coalition: Alternative Fiduciary Proposals Fail to Meet Basic Requirements of Best Interest Standard

The Financial Planning Coalition issued the following statement after filing a supplemental comment letter supporting the Department of Labor’s (DOL) re-proposed fiduciary rule:

“The DOL’s re-proposed fiduciary rule is a long overdue and much-needed update to the 40 year-old definition of ‘fiduciary’ under the Employee Retirement Income Security Act (ERISA). Americans deserve a secure retirement, and the re-proposed rule, with suggested modifications, ensures that the retirement savings advice they receive is in their best interest.

“Proposals from financial services organizations and firms, described as alternative approaches to a best interest standard, would actually dilute the DOL’s efforts to put in place critical protections for retirement investors. All of the alternative proposals fail to meet the basic requirements of a true fiduciary standard under either ERISA or securities law, and fall significantly short of the DOL’s policy goals to more closely align the incentives of firms and advisers with the interests of our nation’s retirement investors.

“While some continue to argue that the rule is unworkable, the Coalition and its stakeholders offer their experience with the fiduciary standard to demonstrate the contrary. Regardless of business or compensation model, the Coalition’s 80,000 financial planners provide financial planning services under a fiduciary standard, successfully contributing to their firms and practices while providing needed benefits and protections for retirement investors.”

Financial Planning Coalition to Congress: Allow DOL Fiduciary Rulemaking Process to Proceed for the Benefit of American Retirement Investors

The Financial Planning Coalition issued the following statement in support of the Department of Labor’s (DOL) re-proposed fiduciary rule, in advance of this morning’s hearing before the House Financial Services Committee’s Subcommittees on Capital Markets and Government Sponsored Enterprises and Oversight and Investigations:

“The Coalition urges Congress to allow the DOL to continue its fiduciary rulemaking process without further delay or obstruction. The DOL has provided – and continues to provide – ample opportunities for input from all stakeholders.

“This strengthened fiduciary rule is long overdue. Under the current 40-year-old regulatory framework, too many Americans receive conflicted advice that is not in their best interest, which eats away at retirement investors’ nest eggs over time.

“The DOL’s re-proposed rule – with some important modifications – will benefit retirement investors and advisers alike, offering a workable, flexible approach across business models. The Coalition’s nearly 80,000 financial planners have committed to providing financial planning services under a fiduciary standard. And since CFP Board adopted the fiduciary standard for Certified Financial Planner™ professionals in 2007, the number of CFP® professionals has grown by more than 30 percent.

“Every American deserves a secure retirement, and the retirement savings advice they receive should always be in their best interest. The DOL’s rule would bring about much-needed re-alignment in retirement advice to better reflect today’s reality, in which Americans are responsible for their own retirement security.”

Ferrara in The Hill: DOL’s fiduciary standard: Good for clients; workable for advisers

The Hill recently published an op-ed by Ray Ferrara, CFP®, Chairman and CEO of ProVise Management Group LLC, former Chair of the Board of Directors of CFP Board, and a former FPA Board Director, endorsing the Department of Labor’s (DOL) proposed fiduciary rule. Ferrara also testified during an August 10 hearing on the rule, convened by the DOL’s Employee Benefits Security Administration.


Earlier this year, the Department of Labor (DOL) re-proposed a rule that would require financial firms and advisers providing retirement advice to do something the vast majority of consumers already believe they are required to do: provide advice that is in the best interests of their clients.

While many advisers strive to do the right thing even though they are not legally required to do so, incentives to sell products often conflict with best-interest advice to clients. The DOL’s common sense proposal to require those who provide retirement advice to function under a fiduciary standard has unfortunately been met with strong opposition – primarily from financial industry groups. They say the rule is “unworkable.” I disagree. What is unworkable and should not continue is the status quo: a regulatory framework that allows for advice that is not in the best interest of clients and that erodes the retirement savings of millions of Americans.

The DOL’s proposed update of its rule is long overdue. I began my career four years before ERISA became law 40 years ago. There were no Individual Retirement Accounts (IRAs), let alone 401(k) plans; many people relied on their pensions; and stock ownership was the province of the well-heeled. Today, that’s no longer the case. Pensions are almost a thing of the past and individuals are required to take on greater responsibility for their finances, including making choices from among increasingly complex financial products to save for a comfortable retirement. Today, American savers invest more than $14 trillion in 401(k) plans and IRAs.

With this shift in responsibility for retirement planning from employers to individuals, the public has lost an important safety net. Now more than ever they need competent and ethical financial advice from professionals they can trust. Research shows that they want and expect this advice to come from people who are going to put their best interest first.

Opponents to the DOL’s fiduciary rule suggest that the rule will limit advisors’ and firms’ ability to serve middle-class retirement investors and will hurt small businesses. This is not consistent with my personal experience.

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Financial Planning Coalition Testifies In Support of Re-Proposed Fiduciary Rule, Urges Prompt Action

DOL fiduciary rule is overdue, needed and workable with modifications

The 40 year-old definition of “fiduciary” under the Employee Retirement Income Security Act (ERISA) for retirement investors is outdated and needs to be amended now, according to testimony given today by representatives of the Financial Planning Coalition, which is 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).

Marilyn Mohrman-Gillis, CFP Board Managing Director of Public Policy and Communications, and Ray Ferrara, CFP®, Chairman and CEO of ProVise Management Group LLC, former chair of the Board of Directors of CFP Board and former FPA Board Director, stated in testimony at a hearing today held by the Employee Benefits Security Administration of the U.S. Department of Labor (DOL) that the Coalition strongly supports the DOL’s re-proposed rule – with important modifications to make it more workable across business models – and encouraged the agency to move forward with the rulemaking process.

In keeping with the Coalition’s efforts to advocate for policy measures that ensure financial planning services are delivered under a fiduciary standard, Mohrman-Gillis noted why the rule is urgently needed and beneficial for consumers.

“Retirement investors face a perfect storm in today’s financial services marketplace. With ever-increasing responsibility for their own retirements and the need to choose from an increasingly complex set of financial products and services, retirement investors more than ever need competent financial advice that is in their best interest,” Mohrman-Gillis said in prepared testimony. “Yet the current regulatory framework allows advisers’ interests to be misaligned with the interests of retirement investors resulting in the loss of billions of dollars in savings.”

The Coalition’s testimony also reflected its unique perspective drawn from CFP Board’s experience in establishing a fiduciary standard for CFP® professionals in 2007. Back then, firms and industry organizations made arguments similar to those being made regarding the DOL rule today, maintaining “that CFP Board’s fiduciary requirement was unworkable with their business models and that CFP® professionals would be forced to rescind their certification if required to operate under a fiduciary standard.”

Mohrman-Gillis remarked that, “contrary to those predictions, the number of CFP® professionals has grown by more than 30 percent to over 72,000 since CFP Board established a fiduciary standard. And many firms, to their credit, are recognizing the value of competent and ethical advice and are supporting CFP® certification for their advisers.”

Ferrara’s testimony underscored the workability of the rule, drawing on his more than 30 years of experience providing fiduciary-level advice across business models as a CFP® professional and small business owner of an independent financial services firm.

“Many in the industry say the re-proposed rule is unworkable, too costly and will force advisers to abandon middle-class clients. Based on our firm’s actual experience, we don’t share these views,” Ferrara said. He added that “the argument that this rule will diminish the availability of services to middle-class Americans is simply not credible. ProVise has successfully served middle-class clients under a fiduciary standard for years. The re-proposed rule still allows us, and everyone else to, provide advice using a commission or fee model. For anyone claiming that they are unable to serve middle-class clients under the re-proposed rule, ProVise and scores of CFP® professionals and FPA and NAPFA members across the country would be happy to help fill the gap.”

The Coalition outlined its full support in a 35-page comment letter submitted to the DOL on July 21, 2015.