If 30 questions weren't enough to satisfy investors' queries about a Labor Department investment advice rule, the agency provided additional resources at the end of
a document released last Friday.
Only two groups cited in the coda to the frequently asked questions were not government organizations: the Certified Financial Planner Board of Standards Inc. and AARP.
The DOL recommended to readers two CFP Board items: its
planner search and
certification websites and its
Consumer Guide to Financial Self-Defense.
The agency also linked to an AARP questionnaire investors can give to their advisers to fill out.
The CFP Board was happy to get the recognition in the
FAQ document, which was intended to be a consumer's guide to the rule.
“Along with our Financial Planning Coalition partners, CFP Board provided extensive input during the rulemaking process illustrating how the experiences of CFP professionals and their clients show that a broadly applicable fiduciary standard represents a win-win for the industry and the public,” Maureen Thompson, CFP Board vice president of public policy, said in a statement.
In its resources list, the DOL left out other credentials, such as chartered financial analyst, chartered financial consultant, certified investment management analyst and certified public accountant, among others.
“The market is competitive with many designation choices,” said Knut Rostad, president of the Institute for the Fiduciary Standard. “I suspect it was a DOL mistake to exclude the other credentials.”
The agency said it meant no slight in limiting its resources list to the CFP.
“We were focused on the tools we found useful,” said a DOL official familiar with the rule who asked not to be identified. “There was no deliberate effort to pick and choose here. If people think there are other resources that are helpful, we're all ears. We're happy to link to them.”
Sponsors of the various advice
credentials often engage in heated rivalries, and certainly want to be on the DOL's radar.
Sean Walters, chief executive of the Investment Management Consultants Association, which grants the CIMA mark, said he will meet next week with Tim Hauser, a DOL deputy assistant secretary who has been instrumental in shaping the rule.
The CIMA “certainly fits very well alongside the CFP in a consumer FAQ, and we'll be making that case to him next week,” Mr. Walters said.
Mr. Walters conceded there are far fewer advisers who carry a CIMA than the approximately 76,000 CFPs in the United States. But he said the CIMA credential identifies advisers who act in their clients' best interests, which is at the heart of the DOL rule.
“The process that CIMA teaches and tests is a prudent investment process,” he said. “It already applies an [Employee Retirement Income Security Act] and pension-plan-oriented process to a private client.”
The CFA Institute would like two of its offerings included as DOL-rule resources. One is its
statement of investor rights and the other is a
guide for finding an adviser.
We are disappointed that the DOL did not include these in the Appendix but encourage investors to view them on our website,” said Kurt Schacht, managing director of standards and advocacy at CFA Institute. “We will follow up with the DOL, whose rule we support, to make them aware of these resources.”
The DOL rule is under attack by congressional Republicans and business interest groups, who hope that the
incoming Trump administration delays its implementation, which is scheduled to start April 10.
Even if the Trump DOL pulls the rule back, there's still a place for private-sector credentials, Mr. Walters said.
“I think any government should value and encourage rigorous voluntary certification in every industry,” he said.
With more than 250 designations in the market, tackling such credentials may offer an alternative avenue if the Securities and Exchange Commission can't get off the dime with its own fiduciary rule for investment advice, according to Mr. Rostad.
“The SEC should consider rulemaking on adviser titles,” he said.
