Planners concerned proposed group would regulate advice

Financial planners are worried about being regulated by the proposed consumer financial protection agency when it comes to dishing out advice about mortgages, taxes and estate planning.

The House Financial Services Committee on Oct. 22 approved legislation that would create such an agency by a vote of 39-29, and a companion draft version of the legislation by the Senate Banking Committee was floated Nov. 10.

Both versions would regulate advice given by financial planners on mortgages, taxes and estate planning, according to officials with financial planning organizations.

“That’s not the appropriate way to regulate financial planners,” said Marilyn Mohrman-Gillis, managing director of public policy for the Certified Financial Planner Board of Standards Inc. “They should be regulated comprehensively.”

Ms. Mohrman-Gillis further explained that while the Financial Planning Coalition — which includes the CFP Board, the Financial Planning Association and the National Association of Personal Financial Advisors — does not oppose the creation of the CFPA, it is concerned that the proposed oversight change regarding some aspects of financial planning would be “another potential piecemeal regulation” of components of what financial planners do.

The Financial Planning Coalition is instead lobbying Washington to create a financial planner oversight board that would come under the oversight of the Securities and Exchange Commission and would regulate financial planners and advisers.

Brokers and investment advisers already regulated by the SEC and the states would be exempted from oversight by the CFPA.

In addition, certified public accountants would be exempted from the CFPA. But many planners who provide tax advice are not CPAs, said Dan Barry, director of government relations for the Financial Planning Association.

“The CFPA paints a pretty broad brush of capturing anything financial,” Mr. Barry said. “It has exemptions, but not the entirety of a planners’ business is carved out” by the extensions, he said.

While the FPC has not yet formally taken a position on the proposed CFPA’s affect on the financial planning business, “that’s a concern,” Mr. Barry said.

E-mail Sara Hansard at [email protected].