NAIFA has consistently said that a poorly conceived universal fiduciary standard imposed on all financial advisors could bring unintended consequences. It could, for example, make financial advice and services more costly or unattainable for the middle market. It could deprive consumers of the ability to choose how they want to pay for those services.
We’ve hardly been alone. Two SEC commissioners have voiced similar concerns, as have members of Congress.
That’s why we’re not sure why the Financial Planning Coalition tried to portray us as an isolated minority during a press call announcing a pro-fiduciary petition signed by a few thousand financial planners.
“There is a small and isolated pocket of opposition from the insurance lobby, particularly NAIFA,” Marilyn Mohrman-Gillis, managing director of public policy and communications of the CFP Board, told reporters during the coalition's call.
NAIFA Vice President of Securities Gary Sanders responded: “We're not trying to scuttle anything. We have raised concerns, and they have not been adequately addressed. A universal fiduciary duty, as they've been describing it, could affect the ability of midmarket consumers not only to afford financial services but also to receive financial advice.”
Others who raise questions about the impacts of a universal fiduciary standard include:
- Financial Advisor magazine
- JD Power and Associates
- Approximately 70% of commentors who responded to an SEC call for comments last year
And while we're not quite ready to say we're in the same camp as Barney Frank on the issue, even universal fiduciary's leading congressional proponent has cautioned the SEC to respect the broker-dealer business model should it decide to write a fiduciary rule.