Quietly hidden amid debates over which agency should house a consumer financial protection agency is a simple consumer financial protection proposal. It would safeguard Main Street residents from malpractice by people claiming to be financial planners.

[IMGCAP(1)]Many special interest groups are pleased that the general public remains largely oblivious to the proposal while they mount a vicious lobbying campaign to kill it.

These groups do not care whether consumers are protected by ethics and competency regulations for financial planners. Less regulation means more money for those who can claim to be financial planners under current laws without proper oversight.

The Financial Planning Coalition has proposed legislation that would establish minimal regulations for financial planners, not unlike measures that govern other professions like law, accounting or even cosmetology.

Champions like Sen. Herb Kohl (D-Wis.) are working hard to add these commonsense pro-consumer financial planning regulations to the bill. But it appears that lobbying efforts — in many cases spreading completely unfounded myths to scare legislators away from the coalition’s proposal — may soon destroy the chances of passing regulations this year.

We seek to protect American consumers from fraudulent or incompetent individuals who market themselves as planners for the sole purpose of making more money. Our proposal will allow American consumers to identify financial planners as honest, competent professionals acting in the best interest of their clients.

Right now, anyone can call himself a financial planner. Across the country, Americans — particularly the elderly — are swindled every day by inappropriate advice from purported financial planners. Bad advice costs consumers many millions of dollars of penalties and commission fees every year. Cases of entire life savings lost to unethical or incompetent advice are, sadly, not uncommon.

In one California case last year, three financial advisers were convicted of stealing $200 million from trusting clients. They held “planning seminars” where they met victims whom they persuaded to invest in bad real estate deals and phony securities. Many victims lost every penny that they had saved. In another California case from 2006, a purported financial planner managed funds for almost 50 clients — and stole more than $35 million from them. Several NFL players were among the victims, along with schoolteachers, the elderly and even the adviser’s longtime friends.

The legislation proposed by Kohl and endorsed by the Financial Planning Coalition would create a safe harbor for the term “financial planner.” It would establish an oversight board that would:

• Require financial professionals to register in order to call themselves financial planners. Prior to registration, they would need to pass a competency exam and agree to ethical standards.

• Be armed with power to discipline planners found in violation of its standards.

• Make key actions, including disciplinary measures, available to the public.

• Require that financial planners be held to the fiduciary standard of providing planning services and advice in the best interest of the client.

Americans support our proposal. A recent study commissioned by the Financial Planning Coalition found that 83 percent of investors, across all demographics and political groups, favor increased regulation and oversight for financial planners. Of the voters surveyed, 91 percent said they supported proposed regulations that included measures to “ensure that financial planners pass tests measuring competency,” to “establish ethical guidelines,” to “have the ability to discipline financial planners who fail to follow the guidelines” and to “make all of this information available to consumers.”

The regulations proposed by the coalition are simple, narrow and straightforward. The Senate should include this commonsense consumer protection legislation in the financial reform package.

Unlike the Financial Planning Coalition, the groups opposing this proposal are not concerned about the best interest of consumers. Listening to their hollow arguments merely perpetuates the era of abuse that Congress aims to end.

Tom Potts is the president of the Financial Planning Association and a leader of the Financial Planning Coalition.