The Financial Planning Act of 2008

Moisand, Dan
October 2008
Journal of Financial Planning;Oct2008, Vol. 21 Issue 10, p78
Academic Journal
• Several recent events have inspired much debate about how the financial planning profession should be regulated. Clearly, the public cannot distinguish between legitimate professional planners and faux planners. Yet planners have reached no consensus as to whether such regulation should be conducted by a state licensing or a federal self-regulatory structure. • This article advocates a state licensing approach in the belief that federal authorities do not understand the financial planning profession well enough to properly regulate it. To stimulate debate over a state licensing approach, the article provides a sample state bill that establishes a state board to license and regulate financial planners, including powers to request criminal proceedings. The bill is a blending of a number of state statutes and proposed statutes for varying occupations, The bill would make it illegal for anyone, with limited exemptions, to practice financial planning or use any language that implies they practice financial planning without being licensed by the state board. The bill covers such areas as a board of professional standards, licenses, disciplinary proceedings, criminal prosecution, reciprocity with other states, eligibility and education requirements, disclosure, ethics, and standards of care. • Comments are inserted at various points in the sample bill to aid in understanding.


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