(On March 30), the United States Court of Appeals for the District of Columbia Circuit spoke clearly in favor of investor protection (Financial Planning Association v. Securities and Exchange Commission). After 7 years of contentious debate, a court of law has rejected the SEC’s untenable argument that it could exempt Wall Street from the fiduciary duties of the Investment Advisers Act of 1940. The legal path chosen by FPA, which many said was fraught with political risks in challenging a powerful federal regulator, has proven that common sense can prevail.
However, the battle over professional standards for persons offering financial planning advice is not over. The SEC is still studying the issue and is expected to release a report on marketing practices of brokers and advisers sometime next year. We urge the SEC to delay any further action on new rules or going to Congress until after this study is completed.
In the meantime, we call on the Securities Industry and Financial Markets Association to work with the SEC on a smooth transition, and not pursue an anti-consumer agenda in Congress.
We call on the SEC not to pursue a review by the Supreme Court. This rule should have died a quick and merciful death 6 years ago. It would not be the best use of taxpayer dollars to prolong a policy that is contrary to the public interest.