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CFP Board 2022 Chair Kamila Elliott, CFP® Testifies at House Subcommittee Hearing on DOL Retirement Security Rule

January 10, 2024

CFP Board 2022 Chair Kamila Elliott, CFP® today testified on behalf of CFP Board in support of the U.S. Department of Labor’s (DOL’s) proposed retirement security rule, stating the following.

"Thank you for the opportunity to testify on behalf of CFP Board in support of the Retirement Security Rule.

I am Kamila Elliott. I served as the 2022 Chair of CFP Board, the professional organization that certifies more than 98,000 CFP® professionals. CFP Board has a fiduciary standard that applies to all financial advice, including one-time sales recommendations. CFP® professionals work for broker-dealers, investment advisers, and insurance companies. They have shown that any financial professional who wants to act in their client’s best interest can do so.

I am here because moderate-income Americans saving for retirement should have the same access to best interest financial advice that wealthy Americans enjoy.

I am here because moderate-income individuals are the people who most need to make every dollar count.

I am here because I believe that if the rule is adopted, moderate-income Americans, will gain – rather than lose – access to retirement investment advice that is in their best interests.

The rule does not prohibit financial professionals from earning commissions. Most CFP® professionals earn commissions.

My firm, headquartered in Atlanta, Georgia, provides financial planning with a focus on middle to high income clients. We are fiduciaries. We provide advice that our clients need, at a price they can afford, and in their best interests. We primarily support communities of color, offering various fee models and no minimum account balances. We are not the only firm that does this. Advisors all over America serve moderate-income retirement savers with best interest advice.

Retirement savers want to work with someone they can trust. But that trust too often is misplaced. Financial professionals can take advantage of regulations that do not require them to operate as a fiduciary. Financial professionals can be paid handsomely for advice that is not in the investor’s best interests. Financial professionals should not be allowed to make recommendations that compensate them well but burden the client with excessively high costs, unnecessary risks, or harmful illiquidity.

Too often, I have encountered situations where retirement savers did not receive advice in their best interests.

For example, I met recently with a woman whose former financial professional recommended that she use her modest retirement nest egg to buy an insurance product that wasn’t right for her. Had she invested in a diversified portfolio in a qualified retirement plan, she now would have tens of thousands of dollars more in accumulated retirement assets – money that would have gone a long way in her retirement years.

In another case, a 48-year-old worker was sold a fixed annuity with an interest rate of less than 2.5% and a surrender period of seven years. This means that, for seven years she will receive a less than market rate return unless she pays a penalty on more than 60% of her retirement assets. This person suffered substantial financial harm from advice that was not in her best interest. By the time she found me, it was too late.

There are severe consequences for conflicted advice. Over time, small differences lead to enormous losses. For some, this may mean having to retire much later. For others, this may mean not having enough money to spend in retirement, including on important expenses. Like health care. Or medications. Workers shouldn’t have to work longer because their financial professional did not act in their best interests. Retirees shouldn’t be unable to afford medicine because their financial professional was looking out for themself.

The wealthy receive financial advice that is best for them. Those with moderate incomes should be treated the same.

On behalf of CFP Board, I encourage you to support the Department of Labor’s Retirement Security Rule. Thank you."

Watch Video of Testimony

Full Written Testimony