An overwhelming majority of registered voters polled by the Financial Planning Coalition — 83% — said they support increased regulation for financial planners. This held true among the 44% of respondents who said they have used a financial planner in the past, according to the results of a survey the coalition released last week.
The coalition is made up of the Certified Financial Planner Board of Standards, the Financial Planning Association and the National Association of Personal Financial Advisors. It collaborated with the Global Strategy Group to do an online survey in January of 404 voters in the Washington area.
"We are fiercely advocating the pro-consumer aspect of regulation," Marilyn Mohrman-Gillis, managing and public policy director for the CFP Board said in an interview. "We wanted to demonstrate that there is public support for pro-consumer regulation."
In conjunction with the survey, the coalition put its key findings in a letter to the Senate Committee on Banking, Housing and Urban Affairs urging lawmakers to back its longtime goal of establishing federal oversight of all professionals who practice financial planning. "There is broad support for the regulations proposed by the Financial Planning Coalition, which would include provisions to ensure that financial planners pass tests measuring competency, establish ethical guidelines for the industry and discipline financial planners who fail to follow these set regulations," according to the letter. "We urge you to introduce language directing the formation of a financial planning oversight board in upcoming financial reform legislation. New standards to increase the requirements for becoming a licensed financial planner will help reduce current unethical practices, and protect consumers and their hard-earned investments."
Last November, Sen. Christopher Dodd, D-Conn., the chairman of the committee, introduced financial reform legislation. It has not come before the full Senate.
In the survey, 91% agreed that regulations and standards for financial planners are necessary to prevent abuse and better serve consumers. Specifically, that same group of respondents said they agreed with the coalition's goals to propose legislation that ensures financial planners pass tests measuring competency, establishes ethical guidelines, has the ability to discipline financial planners who fail to follow the guidelines and makes all of the information available to consumers.
Fifty-four percent of survey respondents also said they held a favorable opinion of financial planners, which was higher than that of investment advisers (39%) and stock brokers (22%). Among respondents who said they have used a financial planner in the past, 46% want the same amount of regulation, and 1% said they would like to see less. Only 7% of respondents overall said they did not support increased regulation for financial planners, mainly because they generally oppose government regulation of industry under any circumstances, said Scott Elder, principal of Global Strategy Group, which is based in New York.
