Key Policy Issues & Positions
The National Association of Personal Financial Advisors (NAPFA) advocates for policies that are important to NAPFA members and to the financial planning profession. As our interests often align with those of other financial planning organizations, NAPFA actively participates in the Financial Planning Coalition, a collaborative of leading financial planning organizations that work together to educate and engage policymakers on the issues and legislation we support.
We advocate for 1) recognition and regulation of financial planning, 2) A uniform fiduciary standard of care, and 3) greater investment advisor oversight.
- Recognition and regulation of financial planning. Financial advisors are intricately involved in the handling of client finances, investments, and deeply personal information. It stands to reason that they should be tested and held to standards that ensure their competence and proper ethical practices. However, the current regulatory landscape covering financial planners is a patchwork that allows virtually anyone to call himself a financial advisor without appropriate tests of competence or adherence to ethical standards. It’s critical that financial planners and advisors are held to basic competency levels and a fiduciary standard to prevent fraud, misrepresentation and consumer confusion.
- Investment advisor oversight. As with many professions, the practice of financial planning changes and grows with time. To maintain an adequate skill level, advisors need to avail themselves of continuing education and undergo examinations that will test their level of proficiency. It is our view that the current rate of examinations of investment advisors by the SEC is inadequate and must be addressed. NAPFA supports authorizing the SEC to collect user fees from registered investment advisors to increase examinations.
- Uniform fiduciary standard of care. Despite what many consumers have been led to believe, not all financial advisors have their best interest in mind when suggesting investment vehicles. They do not practice under a fiduciary standard. All NAPFA members are required to act as fiduciaries – that is, they must always act in the best interest of the client. NAPFA strongly supports a uniform fiduciary standard for broker-dealers and investment advisors. We believe that financial planning services should be delivered to the public with fiduciary accountability and transparency, serving the client's best interest first and always.