Legislation Of Financial Planners in New York Needs Work
- Created: Friday, 02 September 2011 08:38
Apparently the state of New York believes that Americans aged 60 and older need special consideration when it comes to their financial planning. That is not without merit, but it importantly raises questions that require better answers. Is the state of the financial services industry, and its regulatory oversight, such that a state law is needed to ensure competency and right behavior? If so, why only protect the 60+ crowd? And why only people living in NY? Is the CFP designation the most appropriate in all situations (I am a CFP by the way)? What are the inherent problems with financial planners and investment advisors the New York legislators are trying to fix? Could this law create more problems than it fixes (e.g. a person is suddenly required to find a new advisor after many years with a planner they know and trust because they turned 60 today)? How many other states will follow suit but choose different credentials, and how does that impact the industry? Is this a Bandaid on a heart attack? Or is it overkill and unnecessary? Many important questions are raised by the New York bill (more than listed above certainly).
As to the question regarding the state of the industry, I would answer yes, the industry needs to be policed better and the highest standards of behavior established. But not on a state by state basis! New York should be putting pressure on their national representatives to require a fiduciary standard of behavior for all advisors, not just New York advisors. And why just Americans of a certain age? Don’t folks in their fifties need and deserve competent, prudent planning? Of course they do. And so do the 20 somethings that are just getting started with their financial decision-making. An arbitrarily selected age for a law such as this is simply not rationally supportable. Any argument for doing this for a 60 year old is as valid for the 50 year old.