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March 29, 2011 at 12:52 PM
The Financial Planning Coalition held a conference call on Tuesday about its letters to Congress “urging support for the Securities and Exchange Commission (SEC) in establishing a fiduciary standard,” the announcement said, and urging Congress to adequately fund the SEC so that it could meet its regulatory responsibilities.
The Coalition includes three organizations: the Certified Financial Planners Board of Standards, Inc. (CFP Board), the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors(NAPFA).
Funding for SEC Does Not Add to the Deficit
The letter regarding SEC funding, sent on March 8 to individual members of Congress, made the important point that funding the SEC adequately would not cost taxpayers any money, because the SEC already takes in more every year than Congress appropriates to the agency—sometimes hundreds of thousands of dollars more.
The Coalition’s letter said: “we note that the SEC is funded entirely through fees assessed to those who the SEC regulates; taxpayers do not bear the burden of funding the SEC. In short, SEC funding has no effect on the deficit. Due to current funding reductions, the SEC Enforcement Division is cutting back on investigations, important vacancies are going unfilled, and technology upgrades needed to deal with the daily influx of information have been cancelled. At the same time, the size and complexity of SEC oversight responsibilities are significantly outpacing SEC funding.”
The Fiduciary Standard of Care
“The Coalition has advocated for the fiduciary standard for financial planners and others who hold themselves out as advisors” to individual investors, explains the Professional Growth & Business Development Manager for NAPFA, Nancy Hradsky (left). The letter advocating extension of the fiduciary standard, sent on March 24, went to “the entire Congressional Delegation,” saying that the Coalition “supports the SEC in extending the fiduciary standard of care for personal financial advice to individual investors,” and urging Congress to support the SEC in implementing this as soon as possible. (This reporter is a member of the Committee for the Fiduciary Standard.)
We have “urged Congress to support SEC in creating a rule extending fiduciary standard of care, as it applies to investment advisors, to brokers,” says the CFP Board’s Managing Director, Public Policy, Marilyn Mohrman-Gillis (left). This “important consumer reform is long overdue.” In a recent survey conducted by the Coalition, she notes, “97% of investors agreed that a financial professional should put the,” investor’s interests first. Investors “need transparent, accountable markets where their interests would be placed first.”
Mohrman-Gillis added that they “anticipate that the SEC will move forward to implement Dodd Frank” legislation, in short order.
Does the Coalition disagree with Republicans led by Rep. Steve Garrett (left), R-N.J., who have vocally supported the views of SEC Commissioners Kathleen Casey and Troy Paredes that more study is necessary?