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Financial Planning > Behavioral Finance

FPA Calls for Big Regulatory Reform in Treasury Letter

By James J. Green

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In a long, comprehensive comment letter filled with references to the history of financial regulation in the United States, the Financial Planning Association told the Treasury Department on November 16 that it agreed with Treasury’s plans to review the current financial regulatory structure in the United States, “along with ways to improve efficiency, reduce overlap, and strengthen consumer and investor protections.”

The letter came in response to Treasury’s October 11 call for comments on its proposed review, part of Treasury Secretary Henry Paulson’s stated initiative to improve the global competitiveness of the U.S. financial services industry.

FPA noted in its comment letter that “regulatory reform for advice-givers is long overdue,” and stressed its position that while there has been a long, “steady increase in firms offering comprehensive advice to the public…that cuts across regulatory lines,” the problem is that those firms are operating under “inconsistent standards of care.”

The FPA thus reiterated its position posited most notably in its successful lawsuit against the SEC that vacated the so-called Merrill Lynch rule that financial planners and “others who hold out as financial experts or who provide material elements of financial planning to their clients should be held to a fiduciary standard.”

Treasury is planning to develop by early in 2008 a “blueprint” for a more effective regulatory structure for the industry. November 21 was the final day to submit comments.

Meanwhile, FPA announced its annual change in leadership. Richard Salmen of GTrust Financial Partners in Overland Park, Kansas, is the president-elect of the 29,000-member planners’ association for 2008. Mark Johannessen becomes president, while Nick Nicolette becomes chair of the group.

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