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Lobbyists Storm Capitol Hill Seeking Tougher Best Interest Regulation

June 11, 2018

The Financial Planning Association is pushing lawmakers on Capitol Hill to restrict the use of the title “financial planner” to just CFPs, in an attempted tightening of the SEC’s “best-interest” proposal, FA Magazine reports.

The FPA insists the current proposal falls short of protecting investors and David Pickle, partner of Wagner Law Group, says he questions whether the proposed regulation will even let brokers give investment advice without a fiduciary standard, FA Magazine reports.

To solve perceived issues with the best interest proposal, the FPA is lobbying congressional lawmakers to make the proposed fiduciary standard track Certified Financial Planner Board guidelines, which require CFP professionals to always place clients’ interests ahead of their own. The FPA is also calling on the SEC to do more examinations of investment advisors. The SEC examined 15% of RIAs in 2017 and 35% of RIAs have never been examined, FA Magazine reports.

The SEC must be tougher in its “best-interest” proposal if it hopes to protect investors from conflicts of interest because the proposal may cause confusion if it falls short of its goals, the FPA insists, according to FA Magazine.

Barbara Roper, director of investor protection at the Consumer Federation of America, says the SEC’s current written proposal could offer a range of results – from simply furthering the status quo to significantly improving investor protection, Bloomberg reports.

“We don’t know what they mean by best interest” at the moment and if the proposed regulation is left vague, enforcing it will be difficult, she says.

On the opposite end of the spectrum, National Association of Insurance and Financial Advisors lobbyists have been pushing to loosen regulation regarding who can designate themselves an advisor in the proposal.

NAIFA insists limiting who can call themselves an advisor will worsen investors' quality of advice, Diane Boyle, NAIFA’s senior vice president of government relations, says.

By Garrett Keyes
  • To read the Bloomberg article cited in this story, click here.
  • To read the FA Magazine article cited in this story, click here.