The Financial Planning Coalition has thrown its support behind legislation that would designate a national organization to oversee the financial planning profession, set standards of ethics and competency, and establish rules to promote the fiduciary standard of client care.

However, the FPC proposal would preclude the Financial Industry Regulatory Authority from consideration as the regulatory body for financial planners. The coalition said that FINRA would have an inherent conflict of interest in this role, as it is a membership organization for the broker/dealer community.


The American Institute of CPAs has recommended to Congress a series of measures to promote transparency and strengthen investor protections in the U.S. financial system by requiring tighter audit requirements, including:

* The continued registration and regulation of broker/dealers by the Securities and Exchange Commission and professional self-regulatory organizations. Auditors of public broker/dealers and some non-public broker/dealers should be subject to registration, inspection and enforcement by the Public Company Accounting Oversight Board.

* SEC regulation and registration of hedge funds with exemptions for small investment vehicles, such as investment clubs.

* A requirement that newly registered hedge funds obtain annual audits by CPAs.

* Requiring evaluations of controls over custodial functions. Every custodian should be required to retain an independent public accountant to review and report on the effectiveness of its internal controls.


Investment research provider Morningstar graded the United States an A in a global study that measured the experiences of mutual fund investors in 16 countries in six categories - investor protection, prospectuses and shareholders' reports, transparency in sales practices and the media, fees and expenses, taxation, and distribution practices.

The strongest areas of ranking for the U.S. were prospectuses and shareholders' reports, and for fees and expenses. Ranking behind the U.S. were China with a B-plus, and Taiwan, Japan, the Netherlands and Italy with Bs.

(c) 2009 Accounting Today and SourceMedia, Inc. All Rights Reserved.

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