Planners call on SEC to impose uniform fiduciary standard

Current regulations insufficient to protect investors

By: James Langton
June 23, 2011 January 23, 2018
14:15

A collection of U.S. financial planning groups is calling on the U.S. Securities and Exchange Commission to impose a uniform fiduciary standard on everyone who provides investment advice.

The Financial Planning Coalition, which represents a collaboration of the Certified Financial Planner Board of Standards, Inc., the Financial Planning Association, and the National Association of Personal Financial Advisors, delivered a letter to the SEC urging it to apply a fiduciary standard to anyone providing personalized investment advice to retail clients. The letter was accompanied by a petition signed by more than 5,200 planners.

The letter indicates that the groups are “deeply concerned that current regulations governing the delivery of personalized investment advice are insufficient to protect investors”, and it calls on the SEC to establish a strong, uniform fiduciary standard for broker-dealers and investment advisers.

“The Financial Planning Coalition and thousands of financial planners across the nation believe that those who provide personalized investment advice to retail clients should be held to a fiduciary standard,” states the letter. “Requiring advisors to act in their clients’ best interests should help restore the confidence of millions of American investors in the securities markets and facilitate the needed return to the markets as the economy continues to recover.”

It notes that most investors mistakenly believe that brokers and insurance agents are already required to act in the best interest of their clients; and that retail investors overwhelmingly believe that all financial professionals who give personalized investment advice should be required to act in the best interest of their clients and disclose conflicts of interest.

The petition also calls on the SEC to move forward with rulemaking to establish the standard.

Recently, the Ontario Securities Commission said that it would study the question of whether to impose a fiduciary standard on advisors here too; the first Canadian regulator to broach the issue.