WASHINGTON, Dec. 2, 2015 /PRNewswire-USNewswire/ -- The Financial Planning Coalition – comprising Certified Financial Planner Board of Standards, Inc. (CFP Board), the Financial Planning Association® (FPA®) and the National Association of Personal Financial Advisors (NAPFA) – today called on Congress to refrain from any legislation – including a stand-alone measure or a provision in a must-pass omnibus spending bill – that would block the Department of Labor (DOL) from promulgating a final rule to require fiduciary-level advice for all Americans' retirement assets under the Employee Retirement Income Security Act (ERISA).
Testifying before the Subcommittee on Health, Employment, Labor, & Pensions on the Coalition's behalf, Marilyn Mohrman-Gillis, CFP Board's Managing Director of Public Policy and Communications, urged Congressional leaders to allow the DOL's rulemaking to proceed, arguing that the agency has engaged in a comprehensive, deliberative and transparent process.
"The Coalition urges Members to reject any legislative proposal related to the DOL rulemaking – whether standalone legislation or appropriations 'riders' on an omnibus funding bill. Such legislation is unnecessary and would delay or derail a final rule to legally obligate Advisers to serve their clients' best interests," Mohrman-Gillis testified. "Any legislative effort directing the outcome of this open, transparent, and fully participatory administrative process – before the DOL has an opportunity to consider and to incorporate public input into a final rule – is unnecessary and premature."
The Coalition repeated earlier opposition to any bill or legislative mechanism to delay the final rule. In particular, Mohrman-Gillis said that legislation based on the 'declaration of principles' proposed by Representatives Neal (D-MA) and Roskam (R-IL) is unnecessary and would weaken, not strengthen, the fiduciary standard under ERISA.
"A final rule, promulgated by DOL, the expert agency required to enforce ERISA, and fully informed through its rulemaking process, is the best solution to actually ensure that Advisers are required to serve Retirement Investors' best interests," Mohrman-Gillis said.
Mohrman-Gillis also shared the Coalition's unique perspective, based on the experience of CFP® professionals and FPA and NAPFA members who are already committed to providing financial planning services under a fiduciary standard. She emphasized the urgent need for and workability of the DOL's rule to amend ERISA's outdated, 40 year-old definition of fiduciary. "We believe that a strengthened fiduciary rule under ERISA is essential for America's Retirement Investors and is workable for Advisers, and we strongly support adoption of the DOL's re-proposed rule."
In keeping with the Coalition's efforts to advocate for policy measures that ensure financial planning services are delivered in the best interests of the public, Mohrman-Gillis outlined why the rule secures critical consumer protections without reducing access to advice.
"Reliable empirical data from numerous studies conducted by and cited by the Coalition demonstrate that a fiduciary duty will not force Advisers to abandon middle-income households and will not leave them without investment advice," Mohrman-Gillis said.
The assertion from fiduciary critics that advisers will stop serving middle-income savers is based on a faulty industry study that assumed commissions would be banned under the DOL rule. In fact, the rule specifically permits advisers to receive commissions for the sale of securities and insurance products, she noted.
Mohrman-Gillis added, "The Coalition's own experience also belies the notion that Advisers, required to act in the best interest of the client, will be unable to serve middle-income clients. Today, there are thousands of CFP® professionals and FPA and NAPFA members across the country who provide fiduciary-level services to everyday Americans either under commission-based business models or for fees with no or very low minimum asset requirements."
The Coalition outlined its full support in a 35-page comment letter submitted to the DOL on July 21, 2015.
About the Financial Planning Coalition
The Financial Planning Coalition, representing nearly 80,000 stakeholders, is a collaboration of Certified Financial Planner Board of Standards, Inc. (CFP Board), the Financial Planning Association® (FPA®), and the National Association of Personal Financial Advisors (NAPFA). The Coalition seeks to educate policymakers about the financial planning profession, to advocate for policy measures that ensure financial planning services are delivered in the best interests of the public, and to enable the public to identify trustworthy financial advisers by advancing the Coalition's long-term goal of recognition and regulation of financial planners. To learn more, please visit www.FinancialPlanningCoalition.com.
SOURCE Financial Planning Coalition