In establishing the Consumer Financial Protection Bureau, the Dodd-Frank Act was not aiming primarily at investment advisors or broker-dealers. Nevertheless, it is possible that the CFPB will seek to regulate some activities of such firms, particularly financial advisory activities.
Now the CFPB’s Office for the Financial Protection of Older Americans is conducting research, including input that the Office solicited from the public, concerning financial advisory services that are provided to seniors. Among other things, the Office is evaluating senior financial adviser certifications and designations, as well as the sources of information available to seniors about such senior advisor credentials.
These efforts will help the Office to fulfill certain specific mandates under Dodd-Frank, including:
- to monitor senior advisor credentials and to alert the SEC and state regulators of credentials that are unfair, deceptive, or abusive; and
- to make legislative and regulatory recommendations to Congress concerning best practices for (i) disseminating information to seniors about the legitimacy of senior advisor credentials, (ii) enabling seniors to identify the most appropriate financial adviser for their needs, and (iii) enabling seniors to verify a financial advisor’s credentials.
Accordingly, the Office’s current research and study may ultimately result in further action by the SEC, state regulators, or Congress concerning the qualifications of financial advisors to seniors. There is no indication, however, that the Office or the CFPB will seek to directly regulate such advisors. The future, however, remains somewhat cloudy in this regard.