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.