XY Planning Network, the coalition of fee-only financial planners, is suing the Securities and Exchange Commission for creating what it contends is an unfair competitive advantage for broker-dealers with the agency’s controversial Regulation Best Interest investment-advice rule. So reports InvestmentNews.
The lawsuit, filed Tuesday in the U.S. District Court for the Southern District of New York, followed a similar lawsuit filed Monday by seven states and the District of Columbia against the SEC claiming that the investment-advice...
Photograph by Zach Gibson/Bloomberg
XY Planning Network, the coalition of fee-only financial planners, is suing the Securities and Exchange Commission for creating what it contends is an unfair competitive advantage for broker-dealers with the agency’s controversial Regulation Best Interest investment-advice rule. So reports InvestmentNews.
The lawsuit, filed Tuesday in the U.S. District Court for the Southern District of New York, followed a similar lawsuit filed Monday by seven states and the District of Columbia against the SEC claiming that the investment-advice rule, also known as Reg BI, which is meant to lift the standard for how brokers work with clients, is too weak.
Like the states, XYPN arugues that the SEC ignores a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act that says regulations for broker-dealers should be no less stringent than those for RIAs when it comes to delivering financial advice. “But XYPN is also arguing that Reg BI fails to meet rules laid out in the Investment Advisers Act of 1940 that require anyone delivering financial advice for compensation to register as an investment adviser and be subject to the fiduciary standard,” the InvestmentNews article states.
Michael Kitces, a founder of XY Planning Network, said that he is not looking to vacate the SEC rule, but instead wants to see it amended so that RIAs offering financial planning, such as the advisors supported by XYPN, are not undercut by brokers held to a lower standard of care.
--- John Kimelman