Financial Planning Coalition Urges Department of Labor to Revise Its Proposed Exemption and Return to The Essence Of ERISA

The Financial Planning Coalition (Coalition), comprised of the Certified Financial Planner Board of Standards (CFP Board), Financial Planning Association® (FPA®) and National Association of Personal Financial Advisors (NAPFA), is greatly concerned with the Department of Labor’s (Department) 2020 retirement investment advice rulemaking package that reinstates the five-part test under ERISA and proposes a new prohibited transaction exemption (PTE) based on the Securities and Exchange Commission’s (SEC) Regulation Best Interest (Reg BI).  The Coalition respectfully asks that the Department discard the loophole-ridden 5-part test and revise the regulatory definition of fiduciary advice to reflect the realities of today’s retirement investment marketplace.  The Coalition also asks that the proposed PTE not be based on the SEC’s ambiguous and unproven Reg BI, but rather, takes a cue from CFP Board’s Code of Ethics and Standards of Conduct, which requires a fiduciary standard for “financial advice,” interpreted broadly.  It is the Coalition’s belief that the Department needs to revisit the spirit and letter of ERISA and that any PTEs are updated to reflect today’s retirement savings marketplace, which leaves much of the decision-making in the hands of retail investors.  

The Coalition’s comment letter can be found here.