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CFP Board Chair Dan Moisand, CFP® Testifies at DOL Hearing on Retirement Security Rule


December 13, 2023

CFP Board Chair Dan Moisand, CFP® stated in testimony at a hearing today held by the U.S. Department of Labor (DOL) that CFP Board supports the proposed retirement security rule, “which makes clear that the definition of fiduciary, and the obligations that flow from it, apply where investors reasonably believe advice is being provided in their best interests.” The Retirement Security Rule: Definition of an Investment Advice Fiduciary and Related Exemptions Public Hearing featured testimony reflecting a wide spectrum of views from organizations including AARP, Consumer Federation of America, the Insured Retirement Institute, the U.S. Chamber of Commerce and many others.

Moisand's testimony is as follows:

"Thank you for the opportunity to testify today. My name is Dan Moisand. I am a CERTIFIED FINANCIAL PLANNERTM professional. I am a Senior Financial Advisor at Moisand Fitzgerald Tamayo in Florida, a fee-only Registered Investment Advisor firm. I provide financial advice to my clients under a fiduciary standard of conduct.

I have served in leadership roles in three financial planning organizations. I have served on the Board of Directors of CFP Board, which issues the CFP® certification, since 2019. In a few weeks I will be completing my term as Board Chair. From 2002 to 2007, I served on the national Board of Directors of the Financial Planning Association, which is a membership organization for financial planners. I was both President and Chair of FPA. I also served for five years on the Board of the Foundation for Financial Planning, which is focused on pro bono financial planning.

CFP Board is a non-profit organization whose mission is to credential competent and ethical financial planners, uphold CFP® certification as the recognized standard and advance the financial planning profession. Today, more than 98,000 CFP® professionals (or approximately one-third of retail financial advisors in America) from across business models, including investment advisors, broker-dealers and insurance agents — and across all types of compensation models — voluntarily commit to abide by high standards for competency and ethics.

The most significant of these standards is the requirement to act as a fiduciary and, therefore, act in the best interests of the client, at all times when providing financial advice. The scope of CFP Board’s fiduciary duty is broad and covers any communication that reasonably would be viewed as a recommendation. It also covers recommendations about any kind of financial asset, including securities, insurance products, real estate, bank instruments, commodities contracts, derivative contracts, collectibles or other financial products.

CFP Board adopted this standard in 2018. At the time, we were told that the consequence of having a fiduciary duty that applies to all financial advice is that we would have fewer CFP® professionals. That did not happen. In fact, the very opposite is true. The number of CFP® professionals has grown significantly since that time. This is across all business models, including registered representatives of broker-dealers, investment adviser representatives and those with insurance licenses. All of these CFP® professionals are providing financial advice to their clients while committing to act as a fiduciary. Our requirements have not impacted their business. Today, the firms at which CFP® professionals work tell us that they don’t have enough CFP® professionals to meet their clients’ needs.

Consumers also increasingly demand to work with a CFP® professional. This is because we offer what consumers want. CFP® professionals have demonstrated their competence and made a commitment to CFP Board to act as a fiduciary in their clients’ best interests. The overwhelming majority of American consumers want to work with a financial advisor who will act in their best interests. The disconnect, and the reason I am here testifying today, is that the law doesn’t always require advisors to act in their clients’ best interests.

We support the Department’s proposal, which makes clear that the definition of fiduciary, and the obligations that flow from it, apply where investors reasonably believe advice is being provided in their best interests. This definition appropriately applies fiduciary status to those in a relationship of trust and confidence, including in circumstances where the advisor is providing one-time advice. This is consistent with CFP Board’s standards, where the fiduciary duty extends to one-time advice, such as rollover recommendations.

There is good reason for the fiduciary duty to apply to one-time advice. For many retirement investors, the decision as to whether and how to roll over employer-sponsored retirement assets will be the single most important financial decision they will ever make. Billions of dollars of hard-earned retirement savings are being rolled from plans into IRAs each year. If a retirement investor receives bad advice, then the consequences can be enormous. They could have significantly fewer assets at a time when they are hoping to retire. This may mean that investors have to retire much later, or that their standard of living during retirement is significantly worse.

This damage is due to products that put the retirement savings of the American worker at risk but pay high commissions to the seller. Retirement savings must be protected regardless of whether these assets are held in a 401(k) account or an IRA, because so much is at stake. The bottom line is that requiring all brokers, investment advisors and insurance professionals to always provide best interests advice when making financial recommendations is a much-needed retirement protection reform.

There is no reason to believe that the proposal will result in firms turning away clients. Firms have been operating under Regulation Best Interest since 2020. Despite industry concerns about Reg BI causing them to leave unprofitable relationships, we have seen no evidence that broker dealers have been required to turn away clients since Reg BI was implemented. Among other things, firms use technology to economically serve moderate-income investors, including those saving and investing for a secure retirement.

We have also heard some say that the DOL’s proposed rule is not needed because of the NAIC model regulation for insurance producers recommending annuities. We disagree. The NAIC model regulation does not apply a fiduciary standard and does not rise to a Reg BI standard, which is not a fiduciary standard. CFP Board submitted a comment letter to DOL that attaches guidance comparing our Code of Ethics and Standards of Conduct to the NAIC model regulation.

The CFP® professionals in my firm proudly act as fiduciaries when providing financial advice. This is what our clients want and deserve. We believe that the Retirement Security Rule will cause more retirement investors to seek professional investment advice because they will be confident that their advisor is required by law to act in their best interests.

Thank you."