Important conversations continue to take place among various organizations on how best to develop a regulatory structure for a common fiduciary standard for broker-dealers and investment advisers. NAIFA is pleased that the Securities and Exchange Commission is taking a thoughtful approach to the debate, and in January announced that it will call for data that will allow Commission staff “to continue to analyze the various components of the market for retail financial advice.”
As NAIFA President Robert Miller told InvestmentNews late last year: “I don’t want anyone to think that NAIFA is against good, intelligent regulation. We favor intelligent regulation that serves a definite consumer-protection purpose and that preserves the ability of American families to obtain affordable financial services and advice.”
We have seen no evidence from the SEC or any other authority that says NAIFA members are not working in the best interests of their clients. In fact, our members are not overly concerned about becoming fiduciaries as long as the new rule allows them to sustain a business model that allows them to make a living.
The majority of NAIFA members’ clients earn $100,000 a year or less, according to LIMRA. They are small business owners who rely on agents and brokers for a variety of services, ranging from human resources, employee benefits and succession planning services.
A fiduciary standard that takes a ‘one-size-fits all’ approach could carry unintended consequences, such as increasing compliance and litigation costs for advisors. This has the potential to raise the cost of doing business and disenfranchise the middle markets by limiting their freedom of choice and access to advice, products, and services.
We applaud the SEC for taking a deliberate approach and performing a detailed cost-benefit analysis on the proposed fiduciary rule. We’ve seen encouraging signs that the commissioners have begun to understand the important role NAIFA members play in protecting the financial well-being of millions of Americans across the country.