The Financial Planning Coalition today urged the Securities and Exchange Commission to quickly start a rule-making process to implement its recommendation that all advisors-including brokers-be subject to a fiduciary standard. The coalition, however, vowed to resist a GAO study that concluded financial planners don't need additional regulation.

"The GAO's ultimate recommendation-that there is no need for more regulation of financial planning-does not correspond with [the GAO study's] findings," said Marilyn Mohrman-Gillis, public policy director for the Certified Financial Planner Board of Standards, one of the organizations in the coalition.

The coalition spoke out yesterday after the release of three reports that could influence how advisors are regulated in the wake of the Dodd-Frank financial reform act. In addition to the GAO report issued last week, the SEC has issued two reports since Saturday: One that recommended a common fiduciary standard for all brokers and investment advisors, and a second that looked at options for overseeing investment advisors.

The SEC recommendation for a common fiduciary standard was perhaps the most far-reaching of the three, fulfilling a goal that members of the coalition and other segments of the financial advisory industry have spent years fighting for.  Brokers are currently governed by a more limited standard that requires they recommend products that are "suitable" for clients.

"That was a welcomed surprise to all of us," Nancy Hradsky of the National Association of Personal Financial Advisors (NAPFA) said of the SEC recommendation.

Hradsky said the coalition is urging the SEC to quickly start a rule-making process that would implement a fiduciary standard that is consistent with the standard currently applied to investment advisors under the Investment Advisers Act of 1940.

She added that the common fiduciary standard shouldn't be lowered or "harmonized" with the "suitability" standard as the process moves forward. "A strengthened standard of care would greatly increase trust in one of the most public-facing professions in the industry," Hradsky said.

On the GAO study, the coalition voiced agreement with its finding that the current regulatory structure causes confusion among consumers as to when a financial planner is supposed to serve their client's interests first. But Morhman-Gillis contended this finding was contradicted by the study's conclusion that a patchwork of existing laws provides adequate regulation of financial planners.

"We disagree with the GAO's finding that subset regulation of pieces of what financial planners do is adequate to address these consumer protection issues," she said. "Advising Americans on their financial future is a huge responsibility."

On the second SEC study, which focused on the resources dedicated to investment advisor oversight, the coalition expressed concern over a recommendation that some responsibilities be outsourced to a self-regulatory organization (SRO).

"The SEC has been overseeing advisors for 70 years-they have the expertise," said Dan Barry of the Financial Planning Association (FPA). "It's simply a more cost-effective way to enhance oversight to put into an existing infrastructure rather than creating a whole new SRO or multiple SROs."