A government study concluded that existing regulation in financial planning services is adequate, although the Certified Financial Planner Board of Standards, the Financial Planning Association and the National Association of Personal Financial Advisors have all expressed concerns over consumer-protection issues.
Under Dodd-Frank, the U.S. Government Accountability Office was required to conduct a study and submit its findings to determine whether current state and federal regulations are effectively protecting investors from those who present themselves as financial advisors and use misleading titles, designations and marketing.
The report was delivered last week to Congress and found consumers may be uncertain about when a financial planner must serve a client's best interest, chiefly when providing multiple services with different standards of care. The report thus recommended the SEC examine investors' understanding of the various designations a financial planner can have and to team up with states on any problems in the industry. The report also said the NAIC should evaluate consumers' knowledge of the standards related to the sale of insurance products.
