April 7, 1992
TO: INVESTMENT ADVISERS COMMITTEE NO. 16-92
CALIFORNIA INVESTMENT ADVISER ASSOCIATE MEMBERS
RE: FINANCIAL PLANNER LEGISLATION INTRODUCED IN CALIFORNIA
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A bill has been introduced in California relating to the
regulation of financial planners. Specifically, the bill would
authorize the Department of Consumer Affairs to require financial
planners to become licensed. The bill would create the Financial
Planners Policy Board and establish specific standards,
procedures and bonding requirements for regulation of financial
planners. In addition, the bill would impose certain disclosure
requirements upon financial planners and require written
agreements and financial plans to meet specified standards and to
include specified matters.
The bill covers all persons providing financial planning
services to their clients. The term "financial planning
services" is defined in the bill as, "advice regarding strategies
and actions designed to help an individual achieve personal,
family, or household financial goals on the basis of an
evaluation of the personal financial condition and capabilities
of the individual and any other advice or services which are
represented by or on behalf of the provider to constitute a
financial plan or financial planning services."
The bill mandates the Board, among other things, to develop
an examination for the licensure of financial planners and a
periodic followup examination for continuation of licensure
privileges. In addition, the bill would impose a civil penalty
of treble damages for a violation of the statute payable to the
planner's client. Financial planners also would be required to
maintain a bond in the amount of $100,000 in favor of clients.
We will keep you informed of developments.
Amy B.R. Lancellotta
Associate General Counsel
Attachment