Conflict of Interest Rule needs to stand

June 22 marks the Financial Planning Association’s Third Annual D.C. Advocacy Day, which we began in response to members wanting to be more active in supporting policies that advance the financial planning profession and making sure legislators heard from actual practitioners about issues than can affect their livelihoods.

{mosads}Last year, as the U.S. Department of Labor’s fiduciary issue was heating up, we were on Capitol Hill meeting with legislators and regulators to advocate for the rule, as well as to advocate for smart, common-sense changes. We sought changes that would still protect American savers and ease some of the compliance and reporting aspects of the rule, including the extension of the implementation deadline. The one-, five- and 10-year reporting was also eliminated. As part of the Financial Planning Coalition, we have advocated in many different ways, but nothing beats a mass of financial planners in the same place, at one time, speaking with a unified voice.

And our voice is unique: As an association, we represent our members, most of whom are certified financial planner (CFP) professionals, and we were supportive of a rule that many in the industry fought with lobbyists and money and more lobbyists and money. 

And we won. So far.

Before we get too altruistic, a fiduciary standard for retirement savers is just part of the puzzle. As CFP professionals, we already were acting as fiduciaries when providing planning advice. It benefits our practices and our clients to give fiduciary service. Now the Securities and Exchange Commission (SEC) needs to act to cover the rest of the savings gap by extending a uniform fiduciary rule to broker-dealers. Our association is compensation neutral and business model neutral — what draws us together is the fiduciary standard. When we have a client and are providing financial planning, we do it for all of their savings, not just part.

Even as I write there are lawsuits mounting with regard to the Department of Labor’s Conflict of Interest Final Rule — the fiduciary rule — and they will take time to work their way through the courts. This June 22, though, we will be on Capitol Hill to try to thwart the latest threat, H.J.R. 88, which would prevent the department from implementing the Conflict of Interest Rule and which will be considered today. It has already passed both houses on a majority vote. The president vowed to veto the bill when it got to his desk — and he did. Now it will take a two-thirds majority in both houses to override the president’s veto, and you can believe our members of Congress are hearing from the industry that would like to see this rule go away. Far away.

They will hear from us again this year — and the next year, and the year after that. When, eventually, the SEC moves on fiduciary rule-making, we will be there, too, advocating for our members and American savers. To us, there is no better choice.

Sandy is 2016 president of the Financial Planning Association.