April 11, 1994
TO: INVESTMENT ADVISERS COMMITTEE NO. 28-94
CALIFORNIA INVESTMENT ADVISER ASSOCIATE MEMBERS
RE: CALIFORNIA FINANCIAL PLANNERS LEGISLATION INTRODUCED
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Senate Bill 2052 was recently introduced in California to
provide for the licensure and regulation of financial planners.
The bill defines "financial planner" to mean any person who renders
financial planning services, whether as a primary occupation or as
an incident to another business or profession. Excluded from the
bill would be any person (1) engaged in a state or federally
regulated profession or occupation which provides financial advice
to individuals if the person claiming an exemption does not refer
to itself as a financial planner or (2) exempt from regulation
under the federal Investment Advisers Act of 1940 and the
California Corporation Securities Law of 1968. [The Corporate
Securities Law of 1968 currently provides for the registration and
regulation of investment advisers and their associated persons.]
Senate Bill 2052, would:
-- subject financial planners to existing investment
adviser requirements to the extent applicable unless
acting under the supervision of a licensed investment
adviser;
-- prohibit providing financial planning services for
compensation unless the client has entered into a written
agreement with the planner, which agreement includes all
material terms including an itemization of the fees to be
charged and the services to be provided; and
-- require financial planners to furnish a written
disclosure document containing specified information to
each client.
The bill further provides that financial planners shall be subject
to the enforcement, penalty, criminal, and service of process
provisions pertaining to investment advisers and their associated
persons.
The Senate Banking Committee is scheduled to hear the bill on
April 25th. The Institute will continue to monitor this bill and
keep you apprised of its progress. A copy of the bill is attached.
Tamara K. Cain
Assistant Counsel
Attachment