NAIFA CEO Kevin Mayeux, CAE, issued the following statement on the proposed Department of Labor fiduciary rule expected to be made public later today:
“NAIFA is disappointed that the Department of Labor and OMB have decided to move forward with the misleadingly named Retirement Security rule. DOL’s attempt to rebrand its proposal does not hide the fact that it is the offspring of the department’s failed fiduciary-only model for advisory services that would limit consumers’ choices and curtail the access of many middle- and lower-income investors to individualized advice and services. This is the fourth time since 2010 the federal government has tried to expand fiduciary requirements for advisors. This DOL proposal is particularly unfortunate, coming at a time when many Americans are concerned about their economic security and ability to prepare for retirement. NAIFA is particularly disappointed that DOL is trying to saddle advisors and consumers with an additional layer of regulations when the stated goals of the proposed rule are already being achieved by the Securities and Exchange Commission’s Regulation Best Interest and state measures based on the National Association of Insurance Commissioners’ model best interest regulation for annuity transactions, both of which provide robust consumer protections and require financial professionals to work in clients’ best interests.
“NAIFA previously raised our concerns about the proposal with the Office of Information and Regulatory Affairs (OIRA) of the White House’s Office of Management and Budget (OMB) on October 6. Unfortunately, the administration did not take our concerns to heart. The White House’s new Fact Sheet on the rule unfairly characterizes the insurance and financial services industry and misrepresents the vital role agents and advisors play in helping clients prepare for retirement. Referring to legitimate compensation many advisors receive for their work as “junk fees” is insulting and unfair. It disregards the fact that many consumers are best served by models that include products delivered on a commission basis.
“NAIFA will analyze the proposed rule and submit official comments, continue to have discussions with the administration throughout the regulatory process, and work with members of Congress to achieve the best possible outcome for American families who depend on the products, services, and advice of NAIFA members offering a variety of service models to ensure a financially secure retirement.”