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The Obama administration has long been expected to release a proposal for addressing systemic risks in the structure of our financial institutions and systems to avoid future situations of the type that helped create recent economic crises. The new proposal, released on June 17, goes beyond issues of systemic risk to address a wide range of consumer protection issues.
The President's proposal calls for several initiatives designed to protect the interests of consumers, including re-writing standards for broker-dealers when providing investment advice, raising the current standard and aligning it with the fiduciary standard currently in place for registered investment advisers who provide investment advice.
"The Coalition applauds President Obama's announcement of the Financial Regulatory Reform proposal and the commitment to establishing strong protections for consumers of financial products and services that is evident in the proposal," said Marilyn Capelli Dimitroff, CFP(R), Chair of Certified Financial Planner Board of Standards, Inc. "The proposal's recognition that providers of financial advice must be held to a fiduciary standard is an important development that will have lasting benefits for American consumers. Given the increased responsibilities individuals hold for establishing their financial security, all Americans who seek professional financial advice deserve to receive services provided in their best interests."
"The President's proposals indicate the start of renewed attention to ways the financial service industry and our financial regulatory structures can best serve the public," said Richard Salmen, CFP(R), CFA(R), CTFA, EA, President of the Financial Planning Association(R). "But while the proposal addresses several important issues, it does not fill all gaps in our financial regulatory structure or address the baseline standards of competency needed to provide financial advice to the public. For example, a fiduciary standard for those registered as investment advisers or broker-dealers who provide financial advice does nothing to identify the baseline levels of training, examination or experience required to provide competent financial advice. Many individuals not registered as investment advisers or broker-dealers provide - or claim to provide - financial advice to the public without having met essential training or ethical requirements, often leading to narrowly focused advice based on product solutions instead of objective advice focused on the client's long-term financial goals."
"We strongly believe all financial intermediaries who provide financial advice must be held to a bona fide fiduciary standard that places the consumer's interest first," said Diahann W. Lassus, CFP(R), CPA/PFS, Chair of the National Association of Personal Financial Advisors. "We believe that functional regulation of financial planning, which is currently unregulated, would fill a critical regulatory gap and improve the financial health of Americans. We look forward to working with Members of Congress, the Administration, and others as the legislative process moves forward in the coming weeks."
The Coalition was formed in December 2008 to provide the financial planning profession with a strong, unified voice in anticipation of proposals for financial regulation reform, advancing the financial planning profession and enhancing consumer protection by encouraging regulations that will help the public identify those competent, ethical advice-givers who are subject to a fiduciary duty in the delivery of financial planning services. The Coalition has called for the establishment of a professional standards-setting oversight board for financial planners that would be subject to SEC authority.
About CFP Board: The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP(R) certification and upholding it as the recognized standard of excellence for personal financial planning. The Board of Directors, in furthering CFP Board's mission, acts on behalf of the public, CFP(R) certificants and other stakeholders. CFP Board owns the certification marks CFP(R), CERTIFIED FINANCIAL PLANNER(TM) and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements. CFP Board currently authorizes more than 59,000 individuals to use these marks in the United States. For more about CFP Board, visit www.CFP.net.
About FPA: The Financial Planning Association(R) (FPA(R)) is the leadership and advocacy organization connecting those who provide, support and benefit from professional financial planning. FPA demonstrates and supports a professional commitment to education and a client-centered financial planning process.
Based in Denver, Colo., FPA has close to 100 chapters throughout the country representing more than 29,500 members involved in all facets of providing financial planning services. Working in alliance with academic leaders, legislative and regulatory bodies, financial services firms and consumer interest organizations, FPA is the community that fosters the value of financial planning and advances the financial planning profession. For more information about FPA, visit www.FPAnet.org or call 800.322.4237.
About NAPFA: Since 1983, The National Association of Personal Financial Advisors (NAPFA) has provided Fee-Only financial planners across the country with some of the strictest guidelines possible for professional competency, comprehensive financial planning, and Fee-Only compensation. With more than 2,000 members across the country, NAPFA has become the leading professional association in the United States dedicated to the advancement of Fee-Only financial planning. For more information on NAPFA, visit www.napfa.org.
SOURCE The Financial Planning Coalition
http://www.cfp.net/
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