US FPA rejects proposed pension reforms
The FinancialPlanning Association (FPA) in the US has voiced its strong opposition to a US House Committee White Paper that the association says threatens US workers’ ability to rely on independent advice for their pension plans.
The White Paper, a house proposal to reform the current pension law, suggests that bank tellers, insurance agents and stockbrokers should be deemed qualified to act as pension advisers to workers on their 401(k) pension plans.
The US FPA claims that such a move places the power of advice on individuals who lack the professional training required to make informed investment decisions.
At present, most individual financial planners must pass a minimum competency test by state securities regulators, and many have gone further to hold the CFP designation, requiring three years experience and the passage of a two day, 10-hour exam.
But while stockbrokers must take a market-related exam to sell stocks or mutual funds, bank and insurance agents have no mandatory educational requirements.
The disclosure provisions of the White Paper are also unclear, with no requirement for openness about the disciplinary history and credentials of individual advisers.
The US FPA also says it would be questionable whether advisers would be required to disclose their firm’s proprietary interests in 401(k) stock options when recommending an investment.
The US FPA has also questioned the ability of the relevant regulator, the Department of Labor, to oversee thousands of bank, insurance and stockbroker agents who will become newly minted pension advisers.
Recommended for you
The strategic partnership with Oaktree Capital and AZ NGA is likely to pave the way for overseas players looking to enter the Australian financial advice market, according to experts.
ASIC has cancelled a Sydney AFSL for failing to pay a $64,000 AFCA determination related to inappropriate advice, which then had to be paid by the CSLR.
Increasing revenue per client is a strategic priority for over half of financial advice businesses, a new report has found, with documented processes being a key way to achieving this.
The education provider has encouraged all financial advisers to avoid a “last-minute scramble” in meeting education requirements prior to the 31 December 2025 deadline.
