The U.S. Senate Committee on Banking, Housing and Urban Affairs sent the "Restoring America's Financial Stability Act" to the Senate floor on Monday with a key change that would weaken an effort by Sen. Herbert Kohl (D-Wis.) to create a financial planning oversight board and to impose a fiduciary "standard of care" on all sellers of retail investment products.
While the Financial Planning Coalition – made up of the Certified Financial Planner (CFP) Board of Standards Inc., the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA), had lobbied hard for the creation of an oversight board in an effort to upgrade planning industry standards, the bill heading to the Senate floor does not call for the creation of the oversight board. Instead it merely adopts Sen. Kohl's call for the Government Accountability Office to examine current oversight of the financial planning industry at the federal and state level. The Financial Planning Coalition's efforts have been opposed by broker-dealers, insurance agent groups and investment advisors.
Sen. Kohl said after the amendment that the study would not only help expose any gaps in state and federal regulations, but also look at the use of designations being used to take advantage of consumers.
When I interviewed Dr. Larry Barton, president and CEO of The American College, for a cover story in the upcoming April issue of Life Insurance Selling, he had plenty to say on the matter. While Barton said he is actually in favor of a fiduciary standard, he says the puzzle that's created with the Financial Planning Coalition is one of provability.
