Public Policy

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Regulation of Financial Planners

Are financial planners regulated?

Despite providing advice to millions of Americans about critical financial decisions and retirement planning, financial planners are not regulated as a separate and distinct profession. Any person may hold himself or herself out as a “financial planner” without being required to meet basic competency or ethical standards. Given the importance of financial planning to the financial well-being of millions of Americans, particularly older Americans, appropriate regulations are needed – similar to those applicable to doctors, lawyers and accountants – to require financial planners to meet competency and ethical standards.
Why does regulation matter?

The lack of comprehensive regulation of financial planning and of those who provide this important service results in harm to consumers, who can be and are often exploited by unqualified and unethical individuals.

Further, fragmented regulation creates legal “loopholes” and conflicting standards of conduct for the different components of financial planning, allowing providers to choose the standard that is most financially advantageous to them, rather than what is best for the client.

The public is also harmed by:

  • The cost and burden of finding competent, ethical financial planners due to the confusing and conflicting assortment of titles and designations, as well as industry misrepresentation.
  • Individuals holding themselves out as financial planners who do not actually provide financial planning services.
  • Narrowly focused single-product financial advice that is not integrated, comprehensive or in the client's best interest.

WHITE PAPER: Consumers Are Confused and Harmed: The Case for Regulation of Financial Planners

Significant research conducted by the Financial Planning Coalition with quantitative and qualitative data on the insufficient regulatory standards for financial planners em>

A white paper commissioned by the Financial Planning Coalition featuring comprehensive quantitative and qualitative research shining a light on the insufficient regulatory standards for financial planners. Drawing on both new research and analysis of existing industry data, the Coalition concludes that consumers are harmed by the lack of appropriate regulatory standards for those who hold themselves out as “financial planners,” but provide narrowly focused advice, single-product solutions, or advice that is not in the consumers’ best interest.

Download the White Paper | Two-Page graphic Summary

Read the Press Release

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Financial Planning Coalition

CFP Board, the Financial Planning Association®, and the National Association of Personal Financial Advisors are working together as the Financial Planning Coalition to pursue consumer protection and industry reform.

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