Just a little over 10 years ago the Financial Planning Association won its lawsuit against the Securities and Exchange Commission, forcing the agency to vacate its “Merrill Lynch” rule, which excluded brokers from advisory regulations on the grounds that “advice is incidental.”

Will the FPA sue again, more than a decade later, now that the SEC is once again proposing a standard that allows brokers to offer investment advice to customers without abiding by a fiduciary standard?

“It’s a legitimate question,” FPA President Frank Paré said in an interview with Financial Advisor after he had just wrapped up FPA’s fifth annual lobbying day on Capital Hill.

Paré and 85 financial planners met with lawmakers and/or their staffers on the importance of fiduciary duty standards for all financial advisors, the loss of the tax deduction for investment advice and recognition of the financial planning process that FPA promotes.

He talked elaborated further on the issues and the day of lobbying:

FA:  What was your number one policy push in lawmaker meetings?

Paré: There was a little bit of discussion about how advisor fees are no longer tax deductible and commissions, so we discussed the unfair playing field the tax code created. But the primary push was on the fiduciary issue and having not only SEC address this, but also the importance of having consistency across the board.

FA: Did lawmakers' eyes glaze over when you mentioned the term “fiduciary”?

Paré: No, not as much as they once did. I think a lot of folks gained familiarity with a fiduciary standard because of the DOL [Department of Labor fiduciary] rule. Quite frankly, I think they were asking the right questions, now that Fifth Circuit has vacated the rule. We all discussed what the SEC is doing. Is it a fiduciary standard? Or not a fiduciary standard? Is it for transactions or throughout the relationship? Some of those questions were raised on the Hill, which was interesting because they are echoing some of the same questions we have.

FA: Do you worry that the SEC best-interest regulation for brokers is just another version of the “advice-is-incidental” exclusions from fiduciary standards that led the FPA to sue the SEC in 2006?

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