The country's retirement investors overwhelmingly favor a law that would require financial advisors to act as fiduciaries, according to a survey sponsored by the Certified Financial Planner Board of Standards, Inc.
When asked whether financial advisors should be regulated to protect investors, 70 percent of respondents said yes.
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Asked specifically whether there should be regulation requiring advisors to adhere to a fiduciary standard, 75 percent responded yes.
Yet the data was more ambiguous when respondents were asked how likely they are to hire an advisor who adheres to a fiduciary standard.
Investors who already work with a financial advisor overwhelmingly said they would be likely to work with a fiduciary advisor in the future, while only about one quarter of respondents who don't currently work with an advisor said they would be likely to hire a fiduciary advisor.
Investors with more than $100,000 in income were more likely to invest with a fiduciary than respondents with more modest incomes.
The non-profit CFP Board issues its certification to financial planners and holds its designees to a fiduciary standard of care. There are currently about 73,000 advisors in the United States who either hold the CFP designation or are in the process of earning it.
The CFP Board also issues sanctions against CFP advisors who advertise themselves as being fee-only providers, if they don't uphold that standard.
This summer, a federal judge in U.S. District Court for the District of Columbia upheld the CFP Board's authority to sanction certified members when they fail to uphold the standards of professional conduct required of the CFP certification.
In 2011, the CFP Board alleged that Jeff and Kim Camarda, mutual owners of Camarda Financial Advisors and Camarda Consultants LLC, were in breach of the Board's standards because the advisory arm of their business advertised itself as fee-only, while the consulting arm accepted commissions for selling insurance products.
The Camardas appealed the claim to the CFP Board, which upheld the original allegations. The Camardas then sued the Board in federal court.
The latest CFP Board survey shows that consumer use of all financial advisors has increased in the past five years, since the last time it conducted a similar survey.
This year, 40 percent of respondents report working with financial advisors, up from 28 percent five years.
The CFP Board has been active in its support for the Department of Labor's proposed fiduciary rule.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
