More than 90% of NAIFA members have income reported to the government on IRS Form 1099, and very few of them show any appetite for giving up their status as independent contractors, according to a recent survey.
Of those now working as independent contractors, 96% said they would not prefer to be reclassified as W2 employees. Additionally, more than 94% said they did not want to be treated as employees for the purpose of union organizing, with an addition 4% saying they were “unsure.”
NAIFA conducted the survey of 1,309 members who are active agents and advisors to determine the potential consequences of the PRO Act for the profession. The PRO Act would reclassify many insurance and financial professionals as “employees” rather than “independent contractors” under federal labor law. NAIFA argues that such a reclassification will disrupt insurance and financial services business models and limit consumer access to diverse offerings of products, services, and advice.
“Since we run a broadly diversified independent practice, if our ability to be contracted with these carriers was diminished then this has a corollary impact on the clients and consumers we serve,” said Brian Haney, a NAIFA member from Silver Spring, MD. “We have less to work with, so they get less from us.”
The House of Representatives passed the PRO Act earlier this year. The Senate has not yet voted on it. NAIFA will continue to work with members of Congress to protect the interests of agents and advisors and the consumers they serve. NAIFA’s upcoming Congressional Conference provides an ideal platform for insurance and financial services professionals to tell their Senators how the PRO Act would impact their businesses and consumers.
The survey elicited comments from NAIFA members across the country on the potential harm the legislation would do to their businesses and their ability to serve clients.
From NAIFA-TX: “I got in this business to help middle America. Having a corporation control my actions limits my ability to act as their agent.”
From NAIFA-NY: “I want to maintain my ability to sell the products and companies that my clients and I feel are best for them.”
From NAIFA-WA: “It would destroy successful current businesses for no apparent reason or benefit to clients or us.”
From NAIFA-PA: “It will limit my ability to make independent advice to clients and hinder my ability to choose financial products best suited for my clients.”
From NAIFA-DE: “After being an independent contractor for almost 40 years, I am now unemployable! I will not work for someone else, except my clients!”
From NAIFA-CA: “An employer could assign my clients to another employee. My clients chose me because they trust and want to work with me, not someone else.”
From NAIFA-MI: “I work with many blue collar, small independent businesspeople and white collar and service employees. I don't make as much money as those who work with high-net-worth persons, but my efforts contribute to a more financially secure middle class. As an employee I would have to shift my focus to satisfy production requirements.”