Promoting Fiduciary Standards and the Financial Planning Profession

By Michael A. Watkins

The NAPFA Public Policy Committee, consisting of NAPFA volunteer leaders and chaired by Dan Danford, CFP^®, focuses its efforts on important issues and trends that affect NAPFA members and the financial planning profession. 

To place the committee’s work in context, it’s helpful to review NAPFA’s policy goals, partners that help NAPFA magnify its national impact, and current policy objectives and achievements. 

Policy Goals

NAPFA’s policy objectives and advocacy activities are national in scope and focus on developments likely to have a significant, nationwide impact on retail investors, retirement savers, and the financial planning profession. 

NAPFA’s primary policy goal is the regulation and recognition of financial planning as a separate, distinct profession based upon a robust fiduciary standard of care for retail investors that is no less stringent than under the federal Investment Advisers Act of 1940. 

To develop effective strategies that amplify NAPFA’s voice and help achieve its policy objectives, NAPFA actively supports and participates in policy coalitions. Through these, NAPFA and NAPFA advisors play leading roles at both federal and state levels.

Policy Partners

Responding in 2008 to the global financial crisis, NAPFA, CFP Board, and the Financial Planning Association (FPA) launched the Financial Planning Coalition to promote the regulation and recognition of financial planning as a profession incorporating a strong fiduciary standard for all personal investment advice.  

During the 2009 Congressional debate on the Dodd-Frank Act, NAPFA and its partners AARP, American Institute of Certified Public Accountants (AICPA), Better Markets, CFP Board, Consumer Federation of America, FPA, Investment Adviser Association (IAA), and North American Securities Administrators Association (NASAA) convened the Friends of Fiduciary to advocate for a robust fiduciary standard and enhanced investor protections. 

Through these two coalitions, NAPFA advocated for inclusion of strong fiduciary standards in the 2016 Department of Labor (DOL) Fiduciary Rule and the 2019 SEC Regulation Best Interest, and opposed legal, legislative, and regulatory efforts to weaken fiduciary standards. In addition, NAPFA and its partners advocated on the state level for expanded financial literacy education in schools and workplaces, and heightened protections for retail investors, retirement savers, seniors, and vulnerable persons. 

As partner organizations’ priorities evolved, and the Financial Planning Coalition and Friends of Fiduciary wound down their activities, NAPFA continued pursuing its policy objectives through other coalitions and working closely with CFP Board on joint projects. 

The Save Our Retirement Coalition (SOR) includes over 100 national organizations and groups advocating for better protections for retirement investors. The steering committee is led by AARP, AFL-CIO, American Federation of State, County and Municipal Employees (AFSCME), Americans for Financial Reform, Better Markets, Center for American Progress, Consumer Federation of America, Economic Policy Institute, Pension Rights Center, and Public Investors Advocate Bar Association (PIABA). Since 2023, NAPFA and CFP Board have actively participated in a working group organized by SOR to support the 2023 DOL Proposed Investment Advice Rule and its approval as the 2024 Fiduciary Rule.

The Advisory Fee Deductibility Group seeks to restore and expand the federal tax deduction for professional investment and financial planning advice that was repealed by the 2017 Tax Cuts and Jobs Act (TCJA). Participants have included NAPFA, CFP Board, FPA, Financial Services Institute, and IAA. 

The Professional Certification Coalition (PCC) represents over 100 certification organizations nationwide that are concerned about actions by states that might affect their ability to grant private professional certifications (e.g., “NAPFA-Registered Financial Advisor, “CERTIFIED FINANCIAL PLANNER™” certification, etc.).

The Tomorrow’s Workforce Coalition includes over 500 organizations supporting legislation that would permit Section 529 savings plans to pay for postsecondary training and credentialing, such as licenses and professional certifications. 

Policy Objectives

1. Federal Fiduciary Standards  

NAPFA has been actively involved in the development of and support for the Fiduciary Rule. These efforts include meetings with the White House, DOL officials, and Congressional offices; collaborating with CFP Board to provide substantive comments to DOL reflecting CFP^® professionals’ concerns; and public testimony during DOL’s January 2024 public hearings. 

Among the approximately 50 witnesses participating in the 2024 public hearings, Board Chair Daphne Jordan testified on behalf of NAPFA, and Committee Chair Dan Danford testified on behalf of his firm.

In addition to meetings with legislators, regulators, and key stakeholders, NAPFA uses its voice to support the Fiduciary Rule in three important ways: 

• NAPFA has joined nearly 100 organizations that have “signed on” to letters sent to Congressional leaders supporting the Fiduciary Rule and opposing attempts to derail it.  
• NAPFA and its partners are advocating against federal appropriations bills that would prohibit funding for DOL’s implementation or enforcement of the Fiduciary Rule.  
• NAPFA is opposing attempts in Congress under the Congressional Review Act (CRA) to block the Fiduciary Rule. Under the CRA, Congress may review, modify, or disapprove any federal agency regulation. If Congress passes a resolution of disapproval that is not vetoed by the president, the Fiduciary Rule would be nullified in its entirety and DOL would be prohibited from either reissuing it or approving a similar rule until after Congress passes a new law specifically authorizing DOL to do so.  

2. 2025 Federal Tax Bill Effective in 2026

Many of the 2017 Tax Cuts and Jobs Act (TCJA) provisions expire at the end of 2025. NAPFA is collaborating with its advocacy partners to develop legislative options to restore and expand the federal tax deduction for professional investment and financial planning advice aimed to incentivize Americans to seek fiduciary financial advice—which was repealed by the TCJA. 

3. Retirement Security 

NAPFA/CFP Board joint meetings with Congressional offices have resulted in requests for CFP^® professionals’ assistance to address the nation’s retirement security crisis, an increasingly bipartisan issue in Congress. In response, NAPFA and CFP Board organized a working group of CFP^® professionals who produced a draft proposal entitled "Report on Improving the U.S. Retirement Plan System." NAPFA and CFP Board may present this report to Congress as part of their future Capitol Hill joint advocacy efforts. 

4. Protecting Seniors 

NAPFA supports proposals to protect seniors, including initiatives to provide federal grants to state securities and insurance agencies to fight senior investor fraud, create a new SEC task force on senior investors, and fund SEC collaboration with state securities and insurance regulators to fight senior financial fraud. 

5. NASAA Model Rules and State Regulation 

NAPFA maintains a dialog with NASAA about regulatory developments and model state law proposals with a focus on alternative fee models being developed and employed by financial planners. For example, NAPFA filed a comment letter with a state regulator on financial planner fee guidance that highlighted potential disparities in documentation burdens that might favor AUM advisors over advisors who use alternative fee arrangements.

6. Occupational Licensing and Professional Education Funding 

Congress and state legislatures are seeking alternatives to reduce or eliminate barriers to employment based on prior criminal convictions. Through the Professional Certification Coalition, NAPFA advocates for legislative and regulatory approaches that protect the rights of nongovernmental, private certifying organizations to issue and administer professional licenses and certifications. 

7. SEC Investment Advisor Oversight 

NAPFA monitors and comments on the SEC’s oversight of investment advisors. This includes reviewing recently proposed rules involving custody, outsourcing, digital assets (cryptocurrency), data analytics, and doing business over the internet.

Public Policy Committee Invites Your Participation

NAPFA members who are interested in promoting NAPFA’s public policy goals serve as volunteers on the NAPFA Public Policy Committee, which works closely with the NAPFA Board of Directors, CEO Kathryn Dattomo, and the organization’s consultants. The committee meets monthly to discuss developments, provide practitioner insights on significant new rules, and oversee steps NAPFA is taking, such as meetings with key decision-makers and filing public comment letters. 

The active involvement of the committee members ensures the real-world experience of financial planner practitioners is reflected in NAPFA’s policy positions and advocacy. For these reasons, I encourage you to reach out to the Public Policy Committee at any time and respond should it ask for your assistance. The Public Policy Committee and NAPFA’s policy consultants work to represent your interests.

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Michael A. Watkins is president and general counsel of Financial Markets Consultants LLC, which since 2013 has provided regulatory and policy support to NAPFA, the Financial Planning Coalition, and allied capital markets advocacy organizations. Email: watkins@finmarcon.com.

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