Survey: American Investors Want More Protection

Financial Planning Coalition Calls on New SEC Chair to Focus on Fiduciary, Increase Oversight of Investment Advisers

Washington, D.C. – Results of a new survey released today by the Financial Planning Coalition show that by an overwhelming margin, Americans want the federal government to play an active role in protecting investors, including extending a fiduciary standard to broker-dealers who provide personalized investment advice to retail clients. Consumers also want the federal government to protect investors by increasing oversight of investment advisers.

As the Senate Banking Committee considers the nomination of Mary Jo White as the next Chairman of the Securities and Exchange Commission (SEC), the Coalition believes that this nationwide survey demonstrates the public’s continued desire for the SEC to fulfill its mission to protect investors.

The survey showed:

  • 80 percent of American investors do not believe the federal government is doing enough to protect “consumers from being taken advantage of” by financial advisers
  • 84 percent of American investors agree that “financial advisers should be regulated by the federal government to protect investors and build confidence in financial services”

“These results should serve as another wake-up call for the SEC, Congress and the Administration to protect American investors who continue to be vulnerable to fraud and abuse while key Dodd-Frank investor-protection reforms are mired in rulemakings or need follow-up congressional action,” said the Coalition, which is comprised of Certified Financial Planner Board of Standards, Inc., the Financial Planning Association and the National Association of Personal Financial Advisors. The Coalition also restated its support for White’s nomination, noting that they look forward to working with her in the near future.

One of the Coalition’s highest priorities — extending the fiduciary standard of conduct to broker-dealers who provide investment advice to retail clients — received strong support from American investors.

Ninety-three percent (93%) of respondents said that they agree with the statement that financial advisers providing advice “should put your interests ahead of theirs and should have to tell you upfront about any conflicts of interest that potentially could influence that advice.”

“The adoption of the fiduciary standard for broker-dealers will help to restore and strengthen public trust in financial advisers – both investment advisers and broker-dealers – offering long-term benefits to consumers and to our economy,” said the Coalition, noting that it welcomes the opportunity to offer its views in response to the SEC’s recent request for information about costs and benefits related to the fiduciary standard rulemaking process.

The Coalition also strongly advocates for a properly funded SEC to enhance its oversight of investment advisers and to ensure that examinations are conducted at least once every four years, as opposed to the current frequency of once every 11 years. The current level of examinations, which is due to a resource gap at the SEC, is bad for investors and for advisers.

To pay for increased examinations, the Coalition is advocating for Congress to authorize the SEC to collect user fees from SEC-regulated investment advisers. This targeted, efficient and effective solution will provide the SEC with the additional resources it needs to do its job. It comes at no additional cost to taxpayers and is roundly supported by consumer and industry groups, with investment advisers also saying they are willing to pay for the increased oversight. A Boston Consulting Group study commissioned by the Coalition and others in 2011 found user fees to be significantly less costly than a self-regulatory organization (SRO) operated by FINRA and the preferred solution by more than 80 percent of investment advisers.

“American investors remain at risk, as policymakers continue to debate the merits and implementation of these important investor protection provisions in the Dodd-Frank Act,” the Coalition concluded. “We strongly urge the new Chairman of the SEC to champion extending the fiduciary standard and support the user fee option as a way to fund increased oversight of investment advisers. ”

Survey Methodology

Survey conducted by KRC Research on behalf of the Financial Planning Coalition from March 3-6, 2013 via an online inquiry of 1,030 individuals in the U.S. (male and female over the age of 18). Margin of error is ±3.1 percentage points at the 95% confidence level.

Financial Planning Coalition Renews Call for Increased Adviser Examinations by SEC

Washington, D.C., February 12, 2013 – Noting widespread agreement on the urgent need to better protect investors, the Financial Planning Coalition today renewed its call for a proactive, meaningful solution to prevent future investor fraud, including increased investment adviser examinations. With President Obama’s State of the Union being delivered this evening, the Coalition hopes the President will provide greater clarity on the future of investor protection.

Specifically, the Coalition – comprised of the Certified Financial Planner Board of Standards, Inc., the Financial Planning Association (FPA), and the National Association of Personal Financial Advisors (NAPFA), which represents more than 75,000 stakeholders – called for the adoption of the most cost-effective and efficient solution: the enhancement of the Securities and Exchange Commission’s (SEC) existing oversight program. The Coalition strongly supports the SEC using adequate resources for investment adviser oversight to ensure that examinations are conducted at least once every four years without impacting taxpayers or the federal deficit could include the assessment of user fees upon Registered Investment Advisers as an alternative to an SRO regulatory approach.

To achieve the needed oversight, without unnecessarily burdening advisers, small- and mid-sized advisory firms and their clients, the Coalition further encourages solutions that do not require establishing a whole new regulatory bureaucracy. The chosen solution must treat large, mid?sized and small investment advisers consistently and allow Congress continued direct oversight and accountability over the SEC.

The Coalition looks forward to working with lawmakers, regulators and industry groups on this important issue.

Financial Planning Coalition Statement on Nomination of Mary Jo White to Lead SEC

Coalition looks to White to protect consumers and implement a uniform fiduciary standard

Washington, D.C., January 24, 2012— The Financial Planning Coalition, a group representing nearly 75,000 stakeholders, today issued the following statement on President Obama’s nomination of Mary Jo White to serve as Chairman of the Securities and Exchange Commission (SEC):

“In nominating Mary Jo White to lead the SEC, President Obama made a strong statement in support of investor protection. The years of experience Mary Jo White has in prosecuting white-collar criminals is a testament to her commitment to safeguarding investors and the public. The Financial Planning Coalition looks forward to Ms. White bringing this same level of ‘consumer-first’ commitment to the SEC. This includes leading the SEC in continuing to implement the Dodd-Frank law—specifically, carrying out the SEC staff’s own recommendation of extending the fiduciary standard to broker-dealers who provide personalized investment advice to retail clients. We look forward to supporting Ms. White’s nomination and hopefully working with her in the near future. ”