CFP Board Strongly Supports DOL’s New Fiduciary Rule
Amid a possible new rule on fiduciary advice, the Certified Financial Planner Board of Standards (CFP Board) disclosed survey data indicating that most Americans want and expect advisors to act as fiduciaries.
Nearly 97% of Americans agree that the financial professional who provides one-time recommendations or other one-time advice about retirement investments should be required to act in their client’s best interest, the CFP Board noted.
The Department of Labor’s (DOL) proposal, Retirement Security Rule: Definition of an Investment Advice Fiduciary, would amend the definition of an investment advisory fiduciary under the Employee Retirement Income Security Act.
The rule would require most investment advisors, brokers, and insurance agents who make recommendations to retirement plans, plan participants, and clients in individual retirement accounts to adhere to the federal retirement law’s fiduciary standard.
“The Department of Labor’s proposed Retirement Security Rule helps assure clients that they can trust their advisor to help them achieve their investment and retirement goals confidently and ethically,” said CFP Board CEO Kevin R. Keller. “This new rule would close existing regulatory gaps from antiquated regulations that were created in 1975.”
The survey also revealed that 92% of Americans understood that the financial professional who recommended moving their funds out of a workplace retirement savings program into an IRA or annuity was required to make that recommendation in their best interest. Only 5% of respondents did not expect the financial professional to fulfill a fiduciary role regarding retirement investments.
The CFP Board has come out firmly in support of the plan. “CFP Board urges the Department to move forward expeditiously with a final rule that is designed to protect retirement investors,” Leo Rydzewski, CFP Board general counsel, wrote in a letter during the public comment period.
The CFP Board released the survey results on Monday, shortly after the DOL submitted the final version of a rule amending the definition of a fiduciary to the federal Office of Management and Budget (OMB). The OMB has 90 days to evaluate it.
