CFP Board survey: Americans want financial advice to be in their best interest

WASHINGTON, D.C., March 11, 2024 — A new survey commissioned by CFP Board reveals that nearly 97% of Americans agree that the financial professional who provides one-time recommendations or other one-time advice about retirement investments should be required to act in their client’s best interest. This includes a recommendation to roll over funds from a workplace retirement savings program (such as, for example, a 401(k) plan) into an IRA or an annuity.

This finding comes in support of the U.S. Department of Labor’s (DOL’s) proposed “Retirement Security Rule: Definition of an Investment Advice Fiduciary,” an expansion of the fiduciary standard set under the Employee Retirement Income Security Act (ERISA). This rule applies to advice provided to investors by financial professionals regarding their retirement assets, including rollover recommendations.

According to the survey, which polled Americans who have worked with a financial professional, this proposed rule change mirrors the assumptions that Americans make about the advice they already are receiving. Nearly all Americans (92%) understood that the financial professional who recommended moving their funds out of a workplace retirement savings program into an IRA or annuity was required to make that recommendation in their best interest. Americans widely believe that a financial professional giving such advice is doing so as a fiduciary. Only 5% of survey respondents did not expect the financial professional to fulfill a fiduciary role regarding advice on rolling over workplace retirement savings into an IRA or annuity.

“Workers and retirees seek a financially secure and dignified retirement and deserve to have financial professionals delivering retirement investment advice in their best interests,” said CFP Board CEO Kevin R. Keller, CAE. “The Department of Labor’s proposed Retirement Security Rule helps assure clients that they can trust their advisor to help them achieve their investment and retirement goals confidently and ethically. This new rule would close existing regulatory gaps from antiquated regulations that were created in 1975.”

A separate survey of CFP® professionals demonstrates that broadening the fiduciary standard requirement across the financial planning ecosystem will not limit the flexibility of financial planning services, nor will it reduce access to these services for moderate-income investors. Among other things, the survey conducted by the CFP Board Research Team asked about the minimum amount of investable assets that a client must have for the CFP^® professional to provide them with financial advice about those assets (the financial advice may concern any kind of product, service or account type).

After CFP Board expanded the scope of the fiduciary duty in CFP Board’s Code of Ethics and Standards of Conduct (which was effective for all purposes in 2020), 90% of CFP^® professionals chose to maintain their current required minimum investable assets for clients rather than raising the minimum, according to the study.

Similarly, the vast majority of CFP^® professionals (82%) did not raise the minimum investable assets threshold for their clients following the U.S. Securities and Exchange Commission’s (SEC’s) adoption of Regulation Best Interest (Reg BI), which established a “best interest” standard of conduct for securities-related investment advice and went into effect in 2020. Now, nearly four years after Reg BI’s adoption, 42% of CFP^® professionals surveyed do not require their clients to have a minimum amount of investable assets. What’s more, Reg BI had a limited impact on CFP^® professionals’ client rosters — 86% of CFP^® professionals maintained their existing client roster after the regulation’s enactment.

The survey data demonstrate the continued dedication with which CFP^® professionals serve clients from various financial backgrounds, especially those in moderate-income households. More than half of CFP^® professionals (52%) provide financial advice to clients with a household income of $0 to $75,000, and two-thirds (67%) provide financial advice to clients with a household income between $75,001 and $150,000.

"Moderate-income Americans saving for retirement should receive the same access to best interest financial advice as wealthy Americans,” said CFP Board General Counsel Leo G. Rydzewski, J.D., CAE. “The DOL’s proposed Retirement Security Rule is needed to fill the gaps that Regulation Best Interest and the NAIC Model Regulation don’t cover. It is an important step toward improving retirement security for all Americans. If the rule is adopted, moderate-income savers will gain — rather than lose — access to retirement investment advice that is in their best interests.”