8 Investment & Wealth Management Firms Threaten CFP Board Over Fiduciary Rule

Stock Brokerage and Insurance Industries Continue to Fight ANY Fiduciary Rule

The CFP Board recently approved new Standards of Professional Conduct, which will require all CFP professionals to act as fiduciaries when working with clients, regardless of the circumstances. Consistent as ever, the stock brokerage and insurance industries are fighting hard to make sure they have the option not to place their client's interests first.

During the public comment periods, eight investment management firms and multiple industry trade groups aggressively came out against the CFP Board's expanded fiduciary standard. One letter signed by the eight large investment management firms threatened if the CFP Board went through with the new standards, the companies would find a different certification organization (presumably one which doesn't care how they treat customers). The participants in this letter were:

  • Ameriprise Financial Services
  • Morgan Stanley Wealth Management
  • Wells Fargo Advisors
  • Edward Jones
  • LPL Financial
  • RBC Wealth Management US
  • UBS FInancial Services
  • AXA Advisors

A Strategy of Whining & Bullying

In each of the letters, talking points (using nearly identical language) argued against the CFP Board's new standard. The letters brought up concerns over operational difficulties, liability

At their core, the arguments boiled down to two main points, neither being in the interest of clients. First, the new rule would be inconvenient for the firms, and they'd have to do a lot of extra work. Second, the new rule would require them to do more than the bare minimum the government currently requires them to.

What's more disappointing, however, is the firms and industry groups resorted to outright bullying of the CFP Board by implicitly threatening the board. In each letter the companies threatened if the CFP Board expanded their fiduciary rule, the companies would begin "considering alternatives ranging from no longer reimbursing CFP certificants...to exploring alternate designations and certifications". 


Joshua Escalante Troesh is a tenured professor of Business at El Camino College and the founder of Purposeful Finance. He is also the owner of Purposeful Strategic Partners, a Registered Investment Advisory firm. He can be reached for comment at info@purposefulfinance.org