The right regulation will protect American savers and investors
© Getty Images

On Thursday, June 7, the Financial Planning Association (FPA) will be on Capitol Hill to meet with members of Congress and financial regulators during the 5th anniversary of FPA D.C. Advocacy Day. Our members will converge on the Hill to make sure decision makers understand the importance of consumers working with Certified Financial Planner (CFP) professionals, and the other issues we support. This effort is particularly important this year in light of the 5th Circuit Court of Appeals decision to vacate the Department of Labor (DOL) Conflict of Interest Rule, and the Securities and Exchange Commission (SEC) deciding to release its proposed three-part Best Interest Standard.

Our members will be in Washington, D.C. to ensure members of Congress and regulators hear our collective voice as they consider policies that will affect how our members practice.

ADVERTISEMENT
FPA, along with our partners in the Financial Planning Coalition (CFP Board and NAPFA), has long supported a fiduciary standard of care for all consumers who seek personalized investment advice. It is who we are as CFP professionals. Not only do CFP professionals act as fiduciaries when providing financial planning, but FPA lauds CFP Board for revising its standards and strengthening them to provide fiduciary-level advice when all financial advice is provided. We believe consumers deserve no less than true fiduciary advice any time they are working with a financial professional. Right now, consumers are confused about financial standards and titles, which makes it difficult for the average American to know what level of advice they are receiving – unless they are working with a CFP professional.

The SEC proposals are a step in the right direction and we applaud the Commission for working on this issue that is so vital to American families. As we gather input from our members, we realized that obtaining the test results from the proposed Form CRS (Consumer Relationship Summary) disclosures would be critical to how we would provide comments on the proposals. Therefore, on May 21, we signed onto a letter with other organizations requesting the SEC delay the comment deadline for its Regulation Best Interest proposal as well as its CRS until 90 days after testing results for the proposed Form CRS disclosures are made public.

Furthermore, as the SEC Commissioners acknowledged, the proposal is an initial document that will certainly change based on input they receive from those who will be affected by this proposal. We recommend the SEC look to CFP Board’s new Code of Ethics and Standards of Conduct as a model for revisions to the proposed Regulation Best Interest Rule. A strong standard that both protects consumers and holds financial professionals who are subject to the proposal accountable and would make certain that consumers do not need to guess at the standard of care they are receiving.

FPA D.C. Advocacy Day is the culmination of our many state advocacy days across the country, including 25 such advocacy days in 2018 alone. Over the last five years, our voice has grown and our awareness has swelled as our members advocate for our profession. We have successfully opposed the taxation of financial planning services in many states, and our members and chapters are being sought out to serve on financial task forces, committees, and commissions within their states. We have also been strongly advocating for state legislation to protect vulnerable adults from financial exploitation to help our members fulfill their fiduciary obligation for their clients while receiving immunity for reporting suspected financial exploitation. Many vulnerable adults are subject to exploitation from relatives and caregivers and many of our FPA members are in the position to be the first to see this kind of behavior that can devastate a consumer’s retirement.

As the retirement crisis continues, FPA will be there to ensure that American savers and investors are prepared to live comfortably in retirement and to strengthen the retirement system by delivering fiduciary level advice. Americans deserve no less.

Frank Paré, CFP is the 2018 President of the Financial Planning Association (FPA).