Category Archives: Uncategorized

Financial Planning Coalition, AARP and Consumer Federation of America Complete Investor Testing on Form CRS

AARP, Consumer Federation of America, and the Financial Planning Coalition on September 11, 2018, delivered the results of independent usability testing of the Securities and Exchange Commission’s proposed Customer Relationship Summary (CRS).  The results of this testing clearly indicate the need for the Commission to revise and retest the content, language, and format of the CRS.  Recognizing the important role the CRS plays in the Commission’s proposed Regulation Best Interest, the organizations hired Kleimann Communications Group, Inc. to conduct usability testing of the proposed disclosures.

The purpose of the testing was to determine whether typical investors would be able to make an informed choice between a brokerage account and an advisory account based on the disclosures provided in the CRS. In particular, testing focused on whether investors understood key differences in the two types of accounts, whether they understood the different standards of care that would apply, and whether they understood that broker-dealers are not required to provide ongoing account monitoring. The testing demonstrated that many, if not most, investors failed to understand this key information and, therefore, could not use the CRS to make an informed choice of accounts.

Read the full results of investor testing here.

Financial Planning Coalition Comments on New York State Department of Financial Services’ Proposed Amendments to Insurance Regulation 187

The Financial Planning Coalition (Coalition) – comprised of Certified Financial Planner Board of Standards (CFP Board), the Financial Planning Association® (FPA®), and the National Association of Personal Financial Advisors (NAPFA) – recommends that the New York Department of Financial Services revisit two provisions of the proposed amendments to Insurance Regulation 187 in order to 1) establish a clear, strong fiduciary mandate; and 2) strengthen the certification and designation requirements vis-à-vis financial planning and financial advice. The Coalition’s comment letter can be found here.

Financial Planning Coalition Responds to Colorado HB18-111, Concerning the Board of Trustees of the Public Employees’ Retirement Association

The Financial Planning Coalition (Coalition) which is comprised of the Certified Financial Planner Board of Standards (CFP Board), Financial Planning Association® (FPA®) and National Association of Personal Financial Advisors (NAPFA), supports adding a CFP® professional to the Board of Trustees of the Public Employee’s Retirement Association (PERA). The Coalition’s full response can be found here.

Financial Planning Coalition Responds to SEC re: Standards of Conduct for Investment Advisers & Broker-dealers

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 a response to the Securities and Exchange Commission’s request for information (RFI) regarding standards of conduct for investment advisers and broker-dealers.

In its response, the Coalition reiterated its position that any SEC rulemaking on standards of conduct for broker-dealers providing personalized investment advice to retail investors is long overdue, and that it should not serve as a replacement of the DOL’s 2016 fiduciary rule (DOL Rule), but rather as a complement to it. The Coalition additionally shared its views that are based on its real-world experience of applying the fiduciary standard across business and compensation models, including:

  • Fiduciary Standard is Crucial to American Retail Investors Facing Self-Directed Investment Market
  • CFP Board’s Standards Can Complement SEC Rulemaking
  • Lack of a Uniform Fiduciary Standard Exacerbates Investor Confusion and Causes Investor Harm
  • Disclosure-Only Regime is Insufficient
  • Suitability is Not the Same as a Fiduciary Standard in the Best Interest of the Custome
  • SEC Fiduciary Rulemaking Requires Further Consideration of a Variety of Issues

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. The Coalition believes that there is no justification for different standards of care for financial professionals who provide the same services to retail investors. A strengthened fiduciary rule, encompassing the duties of care and loyalty, is both necessary and appropriate for SEC-registered firms and represents to protect American investors. A meaningful, legally enforceable uniform fiduciary standard of care that puts investors’ interests first is the best way to strengthen investor protection when personalized investment advice is dispensed.

Financial Planning Coalition Releases Statement on the Department of Labor’s 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 today’s implementation of key aspects of the Department of Labor’s fiduciary rule:

“The day retirement savers have been waiting for has finally arrived. With critical provisions of the Department of Labor’s new fiduciary rule firmly in place, Americans saving for retirement now know that financial professionals are required to put their best interests first – an essential and long overdue reform. It takes decades for people to save for a comfortable and secure retirement. They deserve to know that their hard-earned assets will be protected and allowed to grow with fiduciary-level advice. Further, financial firms and advisers will see that they can operate and succeed with this rule in place. We strongly urge the Department and members of Congress to work jointly to enable full implementation of the rule.”

The Coalition brings a unique perspective to this discussion. Coalition stakeholders and members have committed to provide financial planning services under a fiduciary standard of conduct. CFP® professionals hold registrations and/or licenses across business models as investment adviser representatives, registered representatives of broker-dealers and/or insurance agents and in many instances hold dual or multiple registrations or licenses. Regardless of business model, or compensation model, they are obligated to provide financial planning services under a fiduciary standard of conduct.

Financial Planning Coalition Statement on SEC Fiduciary Action

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 U.S. Securities and Exchange Commission (SEC) decision to consider a fiduciary rule:

“The Financial Planning Coalition is pleased that the SEC is open to extending the fiduciary standard to broker-dealers who offer personalized investment advice. We are especially encouraged by SEC Chairman Jay Clayton’s particular interest. However, any work done by the SEC should not stymie or undercut the fiduciary rule that will be implemented by the Department of Labor.

A rule considered by the SEC cannot be considered as a replacement of the DOL’s fiduciary rule, which serves as an enforceable standard for advisers to put the interests of Americans who are saving for retirement ahead of their own. The DOL rule and any proposed SEC rule would fall under different statutes and serve different purposes.

Requiring financial professionals to work in the best interest of Americans and their finances is an essential and long overdue reform; many in the financial services industry have already acknowledged and implemented practices to comply with a standard fiduciary rule. The Coalition looks forward to working with the SEC and Chairman Clayton as they pursue this rule-making process.”