Financial Planning Coalition Files Amicus Brief in Support of Department of Labor Fiduciary Rule

Coalition Encourages Court to Dismiss Motion for Summary Judgment

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) – yesterday filed an amicus brief in the U.S. District Court for the Northern District of Texas, supporting the Department of Labor’s (DOL) fiduciary rule and opposing efforts to stop the rule from taking effect.

“The Coalition submits that the experiences of its professionals and their clients show that a broadly applicable fiduciary standard represents a win-win for the industry and the public,” the Coalition wrote in its brief. “The current regulatory framework, however, fails to align advisers’ interests with investors’ by leaving open significant loopholes that allow for the sale of financial products that may not be in the best interests of the investor. The Department’s strengthened fiduciary rule is therefore necessary and appropriate to protect the public.”

In its amicus brief, the Coalition specifically notes their opposition to the current attempt to stop the rule through a court challenge.

The Coalition’s full amicus brief, which can be viewed here, outlines three critical points:

  • Investors currently suffer from a lack of complete, truthful disclosures;
  • Empirical research and the Coalition’s practical experience confirm that middle income investors will retain ready access to professional financial advice under a fiduciary standard of conduct; and
  • Based on CFP® professionals’ experience under standards similar to those required by the Best Interest Contract Exemption, the rule provides a workable solution to allow for advisors to receive transaction-based compensation while providing advice that is in the best interests of the client.

The DOL, through careful deliberation and review, has crafted a final fiduciary rule that reflects extensive public comment and articulates common-sense standards for ensuring financial advice in investors’ best interest. The rule will significantly benefit and protect retirement savers with additional consumer protections and access to retirement advice.

The Coalition’s experience – involving nearly 80,000 financial-planning professionals of all business models and sizes – offers a reality that starkly contrasts with the speculation from the rule’s opponents, and provides the court with a unique perspective on the issues in this case. Thousands of CFP® professionals and FPA and NAPFA members across the country currently provide fiduciary-level services to investors with business models requiring no or very low minimum assets under management.

A 2013 Princeton Survey Research Associates Inc. study revealed that professionals operating under a fiduciary standard reported stronger asset and revenue growth for their clients. Further, a 2014 study showed more than 80 percent of financial professionals who had switched to a fiduciary standard reported that the change was mostly positive for their clients and their own practice. One company noted that it introduced new products with lower surrender fees, saying its products are more “flexible” and “fit better with new trends, customer preference and the market.”

The Coalition firmly believes that when financial professionals operate under a fiduciary standard of conduct, they can continue providing financial advice to investors of all income levels that serves the investors’ best interests.

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Watch: DOL Fiduciary Rule: What Are the Practical Implications?

On July 21, 2016, the Financial Planning Coalition – comprised of CFP Board, FPA and NAPFA – hosted a webinar to discuss the practical implications of the Department of Labor’s new rule amending the definition of “fiduciary investment advice” under ERISA.

In this recorded webinar, ERISA expert Tom Clark, Of Counsel at the Wagner Group, provides a brief review of the DOL rule and address the most frequent recurring questions the Coalition has received from stakeholders, including:

  • The application of the Best Interest Contract Exemption,
  • A discussion of how firms and advisors are reacting to the rule, and
  • Things that advisors and firms need to do to begin the process of complying with the rule.

Please click here to view the webinar questions and answers.

Financial Planning Coalition Commends President Obama for Vetoing H.J. Res 88

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 regarding President Obama’s veto of H.J. Res 88, which would nullify the Department of Labor’s final fiduciary rule:

“The Financial Planning Coalition commends President Obama for vetoing this unnecessary and misguided Congressional resolution, which would have left millions of American retirement savers open to harmful retirement advice. We urge Congress to resist any further attempt to delay or roll back this important consumer protection that ensures retirement savers’ best interests are put first.”

Financial Planning Coalition “Extremely Disappointed” about Lawsuit to Block Final 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 regarding a lawsuit from nine organizations, including the U.S. Chamber of Commerce, to block to the Department of Labor’s final fiduciary rule:

“The Financial Planning Coalition is extremely disappointed that these organizations have resorted to litigation to challenge a popular and commonsense rule that is long overdue. Any further delay in the implementation stands to negatively impact millions of American retirement savers. We urge these organizations to instead join many in the financial services industry, who have already begun implementing the rule, in recognizing that the final fiduciary rule is good for businesses and for consumers.”

Financial Planning Coalition Statement on Senate Vote to Disapprove 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 regarding today’s vote in the Senate to block the Labor Department’s final fiduciary rule under the Congressional Review Act:

“Today’s vote, like the House vote before it, is a misplaced attempt by the Senate to derail a rule that will help millions of Americans grow and protect their retirement savings. We urge Congress to reject this and any future attempts to block this important consumer protection.”

Financial Planning Coalition: SEC Fiduciary Standard “Gaining Steam”

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 regarding the SEC’s latest regulatory agenda, which includes plans to propose rules to establish a uniform fiduciary standard of conduct for broker-dealers and investment advisers when providing personalized investment advice about securities to retail customers:

“Last week’s news that the Securities and Exchange Commission (SEC) intends to move towards requiring broker dealers to provide investment advice under a fiduciary standard is an encouraging sign that this important investor protection, long a Coalition priority, is gaining steam. We believe the Department of Labor’s fiduciary rule provides a framework for an SEC rule that applies the same standards to advice beyond retirement plans and IRAs. Investors – whether receiving advice for retirement assets or other investments – deserve advice that is in their best interests. The Coalition looks forward to working with the SEC on this critical investor protection.”