This March, 26 FPACA members converged in Sacramento to meet with four government agencies as well as 38 legislators – all part of our 3rd annual Advocacy Days, this year a two-day event.
During our meeting at the Department of Business Oversight, which regulates state-registered RIA firms and broker-dealers in California among various other licensees, we continued a conversation with the current Deputy Commissioner Nickolay Kotyrlo, whom we had met previously when he was a manager under the prior administration. Several key staffers also attended the meeting, including the agency’s general counsel and the lead examiner, among others. Mr. Kotyrlo indicated that with the $35 fee recently imposed on representatives of RIA firms, the agency has sufficient resources to conduct firm examinations more frequently. Their goal is to conduct exams on an average of every four years per firm, as opposed to more than 20 years apart, as has been the case in the past. We further explored how we could partner with the agency to host their staff as presenters at member meetings on compliance tips and “best practices.”
For the first time, we also met with the head of the Department of Insurance, Commissioner Dave Jones, to discuss our common interest in weeding out the bad actors in the insurance industry. Commissioner Jones has a strong interest in eliminating fraud and elder abuse by unscrupulous insurance agents. This gave us a basis to explore our organization’s interest in preventing the misleading use of the term “financial planning” or the moniker “financial planner” by individuals who are selling products as opposed to offering comprehensive financial advice, and who further have no obligation to do so in a manner that puts the client’s interests first.
While our main focus is on our members’ professional interests, our advocacy efforts also are complementary to the pro bono work of our chapters and inure to the benefit of consumers. For instance, we also recently met with the State Treasurer John Chiang, whom we met previously when he was the state controller. Treasurer Chiang is committed to pro bono financial education, including the “Manage Your Money Week” program that he launched as controller and plans to continue. We were able to cross-promote our FPA Financial Planning Days around the state through that program’s website, and be featured as a community resource in the media.
Throughout these conversations with officials, we continue to further the national FPA goals of:
- Imposition of a fiduciary standard for all brokers/advisors giving investment advice to retail clients;
- Appropriate oversight of investment advisors, including increasing audits to protect the public;
- Appropriate regulation of financial planners as a profession akin to accountants, lawyers, etc.; and
- Opposition to a sales tax on “services” such as those provided by financial planners (California’s Senate Bill 8).
It is our belief that ultimately many of the issues that affect the daily lives of financial planners (and therefore our clients) are going to be addressed at the state level as opposed to the federal level, which makes our local advocacy efforts extremely important.
Would you like to get involved in advocacy? We encourage you to contact your chapter’s representative to FPA of California (usually an advocacy or government relations position on the board) for ways you can get involved. Also, please join us at our next Advocacy Day in Sacramento or our Advocacy Week in September, and stay tuned for more updates from our email blasts on legislative and regulatory issues.