Regulate Me! Financial planner edition 

"It's not often you see someone advocating for more regulation, but we are...."

Any time you hear those words, you know the speaker (a) is wrong, (b) is asking government to protect her clients from startup competion. Today's case-in-point is the financial planner industry.

Reuters reports:

Financial planners, a fast growing but loosely regulated group, want the U.S. government to keep a closer watch on those who present themselves as trusted advisers to small investors....

The Certified Financial Planner Board of Standards, the Financial Planning Association and the National Association of Personal Financial Advisors -- representing 75,000 certified financial planners and investment advisers -- said on Thursday these reforms ultimately must result in stronger consumer protection.

And that set up the money quote:

"It's not often you see someone advocating for more regulation, but we are because we believe this is a consumer protection issue," said Marilyn Mohman-Gillis of the CFP Board. "Consumers expect that those who hold themselves out as financial planners work in their best interests."

She said there are no ethical or competency standards for an industry whose ranks are growing, though some aspects of the planning business are regulated by the SEC and other bodies.

But Ms. Mohman-Gillis of the CFP Board apparently doesn't read my column, otherwise she'd realize that it is, in fact, often that you see someone asking to be more heavily regulated. We've seen it in the tobacco industry, the toy industry, the food industry, the tax-prep industry, the hedge-fund industry, the insurance industry, the livestock industry, the investment banking industry, the credit card industry, the light-bulb industry, the airline industry, and the oil refining industry.

I could go on. In fact, I could fill a book with examples.

I'm not sure yet the reason for the financial planners to take this tack, but there are plenty potential motivations: keeping out new entrants, boosting consumer confidence, or it could be lobbyists trying to make themselves more important.

Let's watch this one shakeout.

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Timothy P. Carney

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