Loss on health care could strengthen push on financial reform, speaker says

Legislation to rewrite the nation’s financial regulations may be more likely to gain congressional approval if health care reform efforts fail, the chairman of a trade association for financial planners said Wednesday in Colorado Springs.

“This administration needs a win. They have been at this for more than a year and need something to show for it before the November elections,” Richard Salmen, chairman of the Denver-based National Financial Planning Association, told members of the group’s Southern Colorado chapter at the Garden of the Gods Club.

“If we don’t see anything on health care reform, I think you will see them push hard on financial reform,” said Salmen,  who is also senior vice president of GTrust Financial Partners in Overland Park, Kan.,

The Obama administration proposed that all who offer financial advice be held to a fiduciary standard, requiring that the adviser act in the client’s best interest instead of their own, which the insurance and investment banking industries have fought. A coalition of financial planning organizations, consumer advocates and other groups is backing the fiduciary requirement, which is included in the House version of the bill but has been removed from the Senate version.

“Even if we are not successful with this now, we will have a path to weigh in on this” through a study required by the Senate version, Salmen said. “Things have come back too quickly — the market collapsed in 2008 and recovered in 2009. As things return to normal, there is less incentive for Congress to fix it.”

A smaller coalition of financial planning trade groups also is pushing for federal regulation of financial planners through an appointed board to set standards for who can call themselves a financial planner and what sort of training they are required to have. That is not likely to be part of the current reform legislation, Salmen said, but he is hopeful that the industry can move closer to that goal as debate on the legislation continues.
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