Kevin Mayeux, CEO of the National Association of Insurance and Financial Advisors (NAIFA), issued the following statement on the Department of Labor’s beginning of the regulatory process to propose a fiduciary-only rule:
"Actions by the Department of Labor to adopt a fiduciary-only rule for financial professionals are unnecessary and will harm consumers’ access to retirement security for the American middle class. When the Department of Labor put forward its ill-conceived fiduciary regulation in 2016, NAIFA reacted with its formidable grassroots power and used judiciary mechanisms to defeat it.
"Following the defeat of the DOL’s last push for a fiduciary-only standard, the Securities and Exchange Commission implemented the Regulation Best Interest standard, which requires advisors to work in their clients' best interests and significantly enhances consumer protections. Forty states have now adopted the National Association of Insurance Commissioners’ model for annuity transactions, which also puts annuity customers’ best interests first and provides further evidence of the changed landscape and lack of need for a fiduciary-only standard.
"Labor’s previous fiduciary proposal in 2016 would have caused consumers significant harm and made it difficult or impossible for many middle- and lower-market consumers to receive financial services and guidance. NAIFA opposed that regulation and took it to the point of undertaking a lawsuit that resulted in a federal appeals court vacating the rule. Like in 2016, we won’t back down. Our members are the most influential grassroots voice representing the American consumer and have already met with Congressional leaders in May of this year at our Congressional Conference and over the last few weeks during in-district meetings in anticipation of the DOL re-introducing an ill-timed and unnecessary rule.
"Another round of wrangling over Labor Department fiduciary requirements is not what consumers need. They require access to professionals to help them prepare for retirement, build financial security, and protect their families from inevitable financial risks. The protection they need comes from sound financial guidance, not additional federal government regulations. Make no mistake that what Americans need for financial security is the freedom to choose the financial advice and products that fit their unique needs. Implementing a fiduciary-only standard removes every American’s ability to choose how they wish to approach their financial future.
"In addition to the adoption of mechanisms such as the Best Interest standard, NAIFA members agree to abide by a Code of Ethics that requires them to work in their clients’ best interests, which further protects consumers by ensuring that there are reputable practitioners in the market that remain in practice through social proof. Consumers are also protected by myriad existing state and federal laws and regulations. Should Labor move forward with this proposal to layer additional regulations on top of the current robust protections, the Department will inevitably introduce a new slate of unintended consequences for middle and lower-income workers who will be effectively barred from receiving quality financial care concerning retirement. The DOL’s proposed fiduciary rule seems to contradict the White House’s economic agenda, which includes many programs intended to bolster the middle class and provide further access to underserved markets.
"NAIFA has only grown stronger as an association since 2016. We stand ready to fully engage with the Administration, members of Congress, and our industry coalition partners throughout the regulatory process to ensure our victory for standards that are not all or nothing. We will fully evaluate the proposal when it is released and work to protect the ability of insurance and financial advisors to continue providing crucial services and advice to all American consumers."
