On April 9, the Office of Advocacy at the U.S. Small Business Administration (SBA) convened a roundtable on the Department of Labor’s proposed Independent Contractor Rule, a proposal that would rescind and replace the 2024 rule that has created uncertainty for financial professionals and small businesses alike.
NAIFA Trustee Josh O’Gara participated in the roundtable to voice strong support for the proposed rule and to underscore what’s at stake for financial professionals who rely on the independent contractor model to serve their clients. The message was clear: independence is the foundation of how advisors deliver choice, access, and personalized guidance to Main Street Americans.
O’Gara shared firsthand insight into how the 2024 rule disrupted that model. In his practice, he works with 1,900 employers across the Northeast and partners with more than 40 insurance companies to deliver tailored solutions. The previous rule introduced significant confusion about whether advisors could maintain their independent status while representing multiple carriers, a core feature of how they serve clients.
Had those advisors been forced into W-2 classification, the consequences would have resulted in fewer choices for consumers and strained or severed relationships with carriers.
NAIFA has previously provided extensive comments and testimony to the DOL on the topic of preserving independent contractors’ rights. In February, NAIFA CEO Kevin Mayeux said that protecting the independence of financial professionals is critical to preserving access to financial guidance for millions of Americans. “Many financial advisors operate locally as small business owners, employing others on their staff, and serving the members of their communities. Reclassifying them as employees rather than independent contractors would have threated their ability to best serve their clients and to ensure that their small businesses can operate efficiently,” Mayeux said.
O’Gara reinforced that point during the roundtable, explaining that the proposed rule provides much-needed clarity and relief for advisors who operate as independent business owners. He also thanked the SBA Office of Advocacy for its continued leadership in elevating the voices of small businesses and independent professionals.
SBA officials requested additional information from NAIFA on how the insurance industry utilizes 1099 independent contractors and how this model differs from employee-based advisory structures, an opportunity for NAIFA to further demonstrate the essential role independent advisors play in serving Main Street.