Financial Planning Coalition Statement on Court Decision in Support of 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 on the recent court decision in support of the U.S. Department of Labor’s (DOL) ability to issue a Fiduciary Rule:

“Today the American retirement saver won an important victory in a North Texas courtroom as Chief Judge Barbara Lynn supported the Department of Labor’s position that it had the authority to issue a revised fiduciary rule that will protect millions of Americans’ hard-earned retirement assets.

In rendering her 81-page decision, Judge Lynn relied, in part, on the experiences of CFP® professionals operating under a fiduciary standard when providing financial planning services similar to that in the Best Interest Contract Exemption (BICE) as cited in the Financial Planning Coalition’s (FPC) amicus brief:

“Here, the input of amicus Financial Planning Coalition (“FPC”) is pertinent. Although FPC heard the same concerns regarding compensation when it implemented similar standards to BICE in 2008, commission-based compensation has survived, and FPC’s financial professionals continue “to serve middle-income investors using all types of [] compensation models and other innovative methods.”

The Court also finds that the conditions to qualify for BICE are reasonable. FPC notes that its almost 80,000 members have since 2008 successfully operated under a regime similar to that in BICE, including a fiduciary standard, a written contract, disclosure of certain fees, costs, and conflicts of interest, prudency standards, and policies to mitigate conflicts.

The Financial Planning Coalition is gratified that the DOL prevailed in this case. We will continue to encourage the Trump Administration and Congress to avoid delay of the rule’s implementation so that the American retirement saver will benefit from investment advice in his or her best interest.”