The planners' assoc. wants views aired before the regulator starts spinning. The Financial Planning Association wants the SEC to host a forum -- specifically a "roundtable" -- for consumer and industry groups to discuss the findings of an SEC-commissioned RAND Corporation report on consumers' understanding of the different rules governing stock brokers and investment advisors.

FPA president Mark Johannessen says the last SEC roundtable on investment advisory was held in May 2000. "We believe another one is overdue to examine the extensive findings by the RAND report before any new proposed rules are submitted to the Commission by its staff," he adds.

Staff at work

Last week the SEC released the 219-page RAND report. SEC chairman Christopher Cox says the report will assist the regulator's efforts to update regulations covering brokers and investment advisers.

"Our staff is now studying the report and the potential regulatory implications of its findings," adds Cox.

Johannessen says the RAND report "simply confirmed that there is an enormous amount of confusion facing investors [who] can't tell who is selling and who is advising." Given this interpretation of the findings, he says that "the SEC should use the RAND data to start with a clean slate to distinguish between sellers of product from advisers who are legally required to act in the client's best interest."

Last year the FPA won a lawsuit against the SEC that overturned the so-called Merrill rule, which allowed brokers to offer fee-based advisory services without registering as fiduciaries under the 1940 Investment Advisers Act.

The court's decision came down to the view that the SEC has no right interpret legislation.

Though the SEC declined to appeal the court's decision, the FPA has been saying for some time that the SEC might try to use the RAND report, which the SEC commissioned in September 2006, to support new rules to further blur the lines between brokers and investment advisors.

The FPA, which is based in Denver, has about 28,000 members.

Here's the RAND report. Beware though: it takes quite a while to download. -FWR

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