The Financial Planning Association told the U.S. Court of Appeals for the 2nd Circuit on Thursday that the Securities and Exchange Commission’s Regulation Best Interest creates an uneven playing field by allowing broker-dealers to provide investment advice “that typically is provided by financial planners.”
In its amicus — or friend of the court — brief filed in support of the case brought by XY Planning Network against Reg BI, FPA argues that Reg BI allows “broker-dealers to provide investment advice that amounts to financial planning to their customers without registration under the Investment Advisers Act” and the attendant fiduciary duty.
The appeals court agreed to expedite oral arguments in the case against Reg BI brought by seven state attorneys general and XY Planning Network. The date has been set to June 2.
Under Reg BI, “brokers are subject to a ‘best interest’ standard that is undefined by the regulation, while a financial planner is required to register as an investment adviser” under the Investment Adviser Act, the FPA brief states.