Adding its voice to several other organizations, the National Association of Personal Financial Advisors also leant its support to provisions in the new Investor Protection Act of 2009 which would subject all those who provide investment advice to a fiduciary level of care.
In a letter sent July 14 to Reps. Barney Frank (D-MA) and Spencer Bachus (R-AL), Chairman and Ranking Member of the House Financial Services Committee, NAPFA joined the CFP board, the Financial Planning Association, the Consumer Federation of America and the North American Securities Administrators Association, all supporting the bill but encouraging revisions to push for more fiduciary duty.
“We believe revisions will be needed to unambiguously provide for the extension of the overarching fiduciary duty that investment advisors owe their clients under the Advisers Act, to brokers and others who provide investment advice, that this fiduciary duty is explicitly recognized in law, and that the legislation does not in any way undermine the fiduciary duty that already exists under the Act,” the letter states.
NAPFA and the Financial Planning Coalition seek the establishment of a professional oversight board for the financial planners and advisors who provide broad-based financial planning or advisory services to consumers, and those who hold themselves out as financial planners or advisors. The oversight board would establish baseline competency standards and would require that financial planners adhere to the fiduciary standard of care.
“Consumers must be able to realistically judge whether or not a financial advisor is going to act in their best interests,” says NAPFA chair Diahann W. Lassus, CFP, CPA. “A fiduciary standard helps ‘pull back the curtain’ and reveals to consumers who will work for them.”