The CFP Board is expanding fiduciary duty for CFPs and some companies are not happy about it

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by dequeued


Beginning in October 2019, all CFPs will be required to act in the best interests of their clients at all times when providing financial advice. While many CFPs already operate this way, CFPs are currently only required to act as a fiduciary when helping clients with financial planning.

The Opposition

This is a very good thing for investors working with CFPs and probably a good thing for investors in general, but what really struck me is the list of companies responding in opposition to the new rule. Technically, these companies only wanted to delay or limit the scope of the rule, but don’t kid yourself, they did not want this to happen. And it’s a virtual “who’s who” of financial firms milking customers for money:

  • Ameriprise Financial Services Inc.
  • Morgan Stanley Wealth Management
  • LPL Financial
  • RBC Wealth Management US
  • Wells Fargo Advisors
  • Edward Jones
  • UBS Financial Services Inc.
  • AXA Advisors

This one is a little murkier, but there was also a letter from Financial Services Institute (FSI). They also opposed the DOL fiduciary rule. Current employers of their board members include:

  • Raymond James
  • Wells Fargo Advisors
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And who sponsors FSI? There’s a long list of horrible investment companies, but I’ll just list out the top two sponsorship levels:

  • Broadridge (former brokerage arm of ADP)
  • Fidelity Investments
  • BNY Mellon / Pershing
  • American Funds (Capital Group)
  • Brinker Capital
  • Envestnet
  • Prudential
  • Preferred Apartment Communities

I was a little surprised to see Fidelity listed as supporting this organization. I’ve long said I don’t 100% trust Fidelity (especially their financial advisors) to be looking out for individuals, but this is seriously bad company to keep.

But wait, there’s more! The Securities Industry and Financial Markets Association (SIFMA) wrote an opposing letter too. Board members come from such companies as:

  • Broadridge
  • Wells Fargo Advisors
  • Morgan Stanley
  • Edward Jones

And I don’t want to leave anyone out here. Another letter urging delay came from The American Council of Life Insurers (ACLI). I’m not going to list out all of the life insurance companies that peddle life insurance as an investment, but the ACLI Board Chair is the Transamerica President & CEO Mark Mullin. Transamerica is the parent of World Financial Group.

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In contrast, NAPFA (an association of fee-only financial advisors) wrote a letter of support.

There were also a slew of individual CFPs writing letters in response to the proposal. I’m not going to try to summarize those given the sheer number of letters, but I did read a few letters in support of the new fiduciary standard (nowhere near a scientific sample, though).

What does this mean for you?

A lot of people here recommend learning enough about investing so you can manage your own investments, but if you find yourself in a complex situation and in need of professional help, read the wiki article on financial advisors first.

You also don’t need to wait until October 2019 to get trustworthy advice. Many CFPs are members of NAPFA which already requires their members to always act in the best interests of their clients.

And be wary of financial companies that are actively working against your interests.

TL;DR: Wells Fargo Advisors, Edward Jones, Morgan Stanley, Raymond James, and Fidelity (?!)


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