One year after a Securities and Exchange Commission report recommended imposing a fiduciary duty on registered reps, NAIFA remains committed to working with the SEC to ensure that the commission’s final fiduciary rule doesn’t hurt the ability of middle-market investors to receive advice and services.
When the fiduciary proposal arose during the drafting of the Dodd-Frank bill, NAIFA strongly advocated that any SEC fiduciary rule should not threaten the ability of advisors to receive commissions or sell proprietary products. Fortunately, safe harbors in the final Dodd-Frank law preserve these aspects of the business model that currently allows advisors to protect the financial well-being of millions of American families.
Now, NAIFA wants to ensure that the SEC fiduciary rule will not increase compliance and litigation costs for advisors, which in turn would force higher costs for their base of middle-market clients.
“Our biggest worry is that a rule designed to help consumers could wind up doing a lot of harm if it makes the cost of doing business onerous for advisors working with Main Street investors and everyday people saving for retirement,” said NAIFA President Robert Miller. “NAIFA is encouraged by recent signals that the SEC is taking a deliberate approach and preforming a detailed cost-benefits analysis on a proposed fiduciary rule. We’ve seen signs that the commissioners have begun to understand the important role NAIFA members play in protecting the financial well-being of millions of Americans.”
The SEC is expected to request data from industry groups to assist in the cost-benefit analysis and NAIFA officials have expressed a willingness to help.
“At times during this debate, NAIFA has been painted in very broad strokes by people implying we’re opposed to any and all regulation,” Mr. Miller added. “That couldn’t be further from the truth. We favor intelligent regulation that serves a defined consumer-protection purpose and that preserves the ability of American families to obtain affordable financial services and advice.”
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