The Financial Planning Coalition is speaking to legislators and regulators about the need to regulate financial planning as a profession, with a requirement that anyone who provides financial planning should adhere to specific competency standards and the fiduciary standard of care. The Coalition consists of the Certified Financial Planner Board of Standards (CFP Board), the Financial Planning Association (FPA), and the National Association of Personal Financial Planners (NAPFA).
In an exclusive interview in New York on January 26, a delegation of Coalition leaders, Robert Glovsky, 2010 CFP Board chair; Richard Salmen, 2010 FPA chair; and William Baldwin, 2010 NAPFA chair, sat down with Wealth Manager to describe their quest for a Professional Regulatory Organization (PRO), for financial planners, which would operate under the SEC.
They’ve also been advocating for the fiduciary standard for those who provide advice to individual investors, favoring the wording proposed in the Discussion Draft of the Senate’s financial services reform legislation, which would require brokers who provide advice to individual investors to register as investment advisors. Investment advisors are required by law to abide by the fiduciary standard. The Senate’s proposed legislation would also do away with the Broker/Dealer exemption, which allows brokers to provide “incidental advice” without being held to the fiduciary standard.
The PRO would license individual planners by exam, akin to the exam registered representatives take for licensing or any other kind of professional exam. Theoretically, this would mean that if an investment advisor offered financial planning as part of their practice, they’d be regulated by SEC directly for the investment part of the practice and by the PRO for the planning part of the practice. The group has produced a “Coalition Facts Opposition Myths,” paper, to “set the record straight,” about what the Coalition wants to accomplish.
Comments? Please send them to kmcbride@wealthmanagerweb.com. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.
Related Articles
Comment on This Article