A coalition of top financial planning organizations is urging the Department of Labor (DOL) to maintain its stance on the proposed Retirement Security Rule. In a joint letter dated May 22, leaders from the CFP Board, Financial Planning Association (FPA), National Association of Personal Financial Advisors (NAPFA), and XY Planning Network (XYPN) called on Labor Secretary Lori Chavez-DeRemer to keep defending the rule, which is currently under legal scrutiny in the Fifth Circuit Court of Appeals.

The proposed fiduciary rule mandates that financial professionals act in their clients’ best interests when advising on retirement assets—an area not fully protected under existing regulations such as the SEC’s Regulation Best Interest (Reg BI). The coalition emphasized that the rule fills crucial regulatory gaps and aligns with public expectations for retirement advice.

Citing 2024 research from the CFP Board, the letter noted that 92% of Americans believe financial professionals should act in their best interests, and 97% support this standard even for one-time advice. The groups argued that despite concerns, stricter fiduciary standards have not reduced access to financial advice. They pointed to XYPN’s 29% annual growth in serving Gen X and Gen Y clients without requiring asset minimums as evidence.

The coalition rejected claims that the rule would hurt middle-income investors, asserting instead that it would shield retirement savers from biased advice that benefits advisors more than clients. They also referenced recent actions by regulators, including the North American Securities Administrators Association, which updated its Conduct Rule to limit the use of “advisor” titles to certified professionals.

They praised the DOL for updating what they described as a “50-year-old, outdated rule,” noting that the modernization is essential for protecting today’s retirement investors—especially in areas like insurance products that currently fall outside the reach of existing standards.

The coalition concluded by urging the DOL to stay the course, emphasizing that American workers and retirees deserve confidence that their advisors are acting in their best interest as they plan for a secure and dignified retirement.

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News Source: InvestmentNews.com