Despite claims of GOP lawmakers, FPC says issue of single standard of care has been thoroughly studied
Financial Planning Coalition is pushing back against efforts to delay the imposition of a fiduciary duty on all retail advisers.
House Republicans this month called for the SEC to perform a cost benefit analysis before proceeding with fiduciary rulemaking.
But the coalition believes “this issue has been studied extensively” already, Marilyn Mohman-Gillis, managing director of the Certified Financial Planner Board of Standards Inc., said on a conference call with reporters today.
“The SEC's 200-page study [on fiduciary duty] was comprehensive, there have been other numerous research efforts, and our own study found that 97% of investors felt financial professionals" should follow a fiduciary standard, she said.
The January SEC report, mandated by the Dodd-Frank financial reform law, recommended the creation of a universal fiduciary standard. Dodd-Frank also authorizes the SEC to proceed with rulemaking.
"If the SEC believes there needs to be further research … certainly we would support that," Ms. Mohman-Gillis added.
But in the meantime, the coalition is "urging that the SEC move forward" with rulemaking, she said.
The coalition last week sent a letter to all members of Congress supporting what it called the "common sense reform" of a fiduciary standard.
Opponents of a fiduciary duty, the letter said, “prefer the status quo, a system in which many investors unknowingly receive advice that mainly benefits their advisor.”
Earlier this month, Rep. Scott Garrett, R-N.J., chairman of the Capital Markets Subcommittee, and 13 of his GOP colleagues on the panel, sent a letter to SEC Chairman Mary Schapiro demanding a "thorough cost benefit analysis" before proceeding with rulemaking.
A spokesman for Mr. Garrett was not immediately available.
Yesterday, a Jennifer McHugh, senior adviser to Ms. Schapiro and coordinator of the fiduciary study, told an audience at an Investment Company Institute conference in California that SEC action on the fiduciary issue likely will occur later this year.
The SEC earlier had indicated it would begin rulemaking by June, but the agency is still grappling with how to implement the standard, Ms. McHugh said.
The coalition will be "having conversations with SEC staff about [moving] forward as expeditiously as possible," Ms. Mohrman-Gillis said.
The Financial Planning Coalition is comprised of the CFP Board, the Financial Planning Association and the National Association of Personal Financial Advisors.
