Are Compliance Issues Changing the Nature of the Financial Planning Business?

Opiela, Nancy
April 2005
Journal of Financial Planning;Apr2005, Vol. 18 Issue 4, p36
Academic Journal
The article deals with regulatory issues facing financial planners in the financial services industry in the U.S. In 2004, the Securities and Exchange Commission approved amendments under the Investment Advisers Act of 1940, requiring registered advisers to adopt a code of ethics and appoint a chief compliance officer. Planners support the goals of new regulations, and many routinely disclosed their methods of compensation and conflicts of interest before the regulatory emphasis on disclosure. Whatever the level of angst, the overload of paper created by new disclosure requirements is changing the very nature of the financial planning business--from the clients planners feel they can serve effectively and profitably to their expectations of the firms they deal with. Perhaps the most visible change resulting from greater disclosure is that many advisors are moving from commission-based financial products to fee-based services. Mark Furman of Integrated Financial Services in Uniondale, New York, and Boynton, Florida, is also hopeful that life with disclosure will improve. David R. Bergmann of the David R. Bergmann Group in Marina Del Rey, California, acknowledges that the advisor community does not have the wherewithal to personally complete due diligence on all mutual funds, but he believes advisors should at least be questioning the due diligence their vendors go through to ensure the selection process is free of conflicts.


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