PLANNERS PUSH TO EXTEND FIDUCIARY STANDARD
Washington, D.C. - The Financial Planning Coalition has asked the Securities and Exchange Commission to extend the fiduciary standard of care to broker-dealers and other financial professionals who provide personalized investment advice to retail customers.
The coalition, uniting the CFP Board, the Financial Planning Association, and the National Association of Personal Financial Advisors, argued in a letter to the SEC that the current standard of care for the provision of personalized investment advice by broker-dealers is ineffective, and there is a significant legal and regulatory gap in that broker-dealers can provide the same service as investment advisors at a lower standard of care.
The Dodd-Frank Wall Street Reform and Consumer Protection Act gave the SEC the authority, following a six-month study, to extend the fiduciary standard of care to brokers or dealers who give personalized investment advice to retail customers. The fiduciary standard of care would require broker-dealers to act in the best interest of their clients, which is a higher standard than the suitability standard to which they are currently held.
The letter came during a 30-day comment period, now closed, on the SEC's "Study Regarding Obligations of Brokers, Dealers and Investment Advisers."
CFP BOARD: MORE DISCLOSURE
Washington, D.C. - The Certified Financial Planner Board of Standards has recommended enhancements to the Securities and Exchange Commission's proposed rules for target-date funds, including better disclosure in the funds' advertising and marketing materials.
The CFP Board recommended that the funds provide better disclosure in their ads and marketing materials, more specific information about their glide path and asset allocation, and greater descriptions of asset classes. The board's letter came in response to the SEC's comment period on the proposed amendments to Rule 482 under the Securities Act of 1933 and Rule 34b-1 under the Investment Company Act of 1940.
