Financial Services Organizations Urge Congress to Help Americans Access Advice During Crisis

Restoration, Expansion of Financial Advice Deduction Key to Helping All Americans

A group of financial services associations is urging Congress to help Americans access a service they crucially need – competent and ethical financial advice to help them survive, emotionally and financially, during the economic crisis spawned by the coronavirus pandemic.

The Investment Adviser Association (IAA), Certified Financial Planner Board of Standards (CFP Board), the Financial Services Institute (FSI), the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA) are calling on lawmakers to restore – and expand – the deductibility of professional investment and financial planning advice. That deduction was repealed in 2017 with enactment of the Tax Cuts and Jobs Act (TCJA).

The repeal of the deduction may have appeared inconsequential with 2017’s rising stock market, sustained job growth and slowly increasing real wage growth,” said Kevin Keller, CEO of CFP Board. “But in this moment of crisis, millions of Americans, including many near retirement, are watching the money they worked so hard to earn and to save evaporate virtually overnight. It is crucial that they have affordable access to competent, ethical advice now and in the foreseeable future.”

Investors and savers are certainly anxious in this environment and unsure about whether they will be able to meet their financial goals,” said IAA President & CEO Karen Barr. “Investment advisers and financial planners have never been more important than they are in these extremely difficult times. And they are working hard to help American taxpayers make wise decisions about their finances in the coming months as the longer-term economic impact becomes clear.”

The organizations are asking Congress not just to restore the deductibility of professional investment and financial planning advice – they are asking legislators to expand it. Prior to the 2017 tax law, the deduction was allowed only for taxpayers whose advisory fees exceeded 2 percent of Adjusted Gross Income (AGI). Many criticized that limitation as unfairly benefitting upper-income households more than middle-income households. The groups are urging that the deduction be restored for investment advisers and financial planners without the 2 percent threshold.

Now more than ever, all Americans are in crucial need of professional financial advice from their trusted financial advisor,” said FSI President & CEO Dale Brown. “The advisory fee deduction should be available to all American households, regardless of income, as a matter of tax fairness.”

Every day, Americans are frightened by the extreme stock market volatility, the deteriorating business environment and the state of their personal household finances,” said NAPFA CEO Geof Brown. “These Main Street investors realize tremendous immediate benefits when they have access to affordable professional financial advice to help them manage their finances. Access to such advice is even more important in these turbulent times.”

The five associations had urged Congress to include expanded advisory fee deductibility in the $2.2 trillion coronavirus emergency stimulus package that was signed into law on March 27. The coalition will now advocate for inclusion of the measure in the “phase 4” relief legislation to be considered by Congress.

ABOUT CFP BOARD

Certified Financial Planner Board of Standards, Inc. is the professional body for personal financial planners in the U.S. CFP Board sets standards for financial planning and administers the prestigious CFP® certification – one of the most respected certifications in financial services – so that the public has access to and benefits from competent and ethical financial planning. CFP Board, along with its Center for Financial Planning, is committed to increasing the public’s awareness of CFP® certification and access to a diverse, ethical and competent financial planning workforce. Widely recognized by firms and consumer groups as the standard for financial planning, CFP® certification is held by more than 86,000 people in the United States.

Contacts:

Investment Adviser Association

Neil Simon, Vice President, Government Relations
neil.simon@investmentadviser.org, 202-293-4222

Herb Perone, Vice President, Communications & Marketing
herb.perone@investmentadviser.org, 

Maureen Thompson, Vice President, Policy
mthompson@cfpboard.org, 202-379-2281

Financial Services Institute

Dale Brown, CAE, President & CEO
dale.brown@financiaservices.org, 202-379-0943

National Association of Personal Financial Advisors

Geof Brown, CAE, CEO
browng@napfa.org, 888-333-6659 x101

Financial Planning Association

Josephine Colacci, Public Policy Counsel 
jcolacci@onefpa.org, 303-759-0749