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Advocacy in action blog

NAIFA has submitted a comment letter to SEC Secretary Vanessa Countryman sharing concerns about the SEC’s proposed rule on the use of predictive data analytics by financial professionals. The proposal, which would place new burdensome requirements on broker-dealers and investment advisers using a broad array of investments-related technology, would have a “devastating effect on our members and their primary clients: low- and middle-income savers and investors,” the letter states.

Among NAIFA’s main objections to the proposed rule are:

  • The proposal fails to provide a thorough practical or economic analysis of the proposed rule. Such an analysis, which is required by law, would likely find that the financial services industry uses technologies that would be impacted by the rule to better serve clients and reduce costs. The proposal is likely to sharply increase costs for financial professionals without benefitting consumers. It would reduce savings and financial planning opportunities for the consumers it aims to protect.
  • The is overbroad in its classification of technology.
  • The proposal is at odds with the SEC’s Regulation Best Interest, which provides strong protections for consumers and provides ways for financial professionals to deal with potential conflicts of interest without reducing consumers’ choices or ability to receive products, services, and advice.
  • Reg Bi and the NAIC’s model regulation for annuity transactions already require financial professionals to act in clients’ best interests.
  • The proposed rule would have a devastating impact on low- and middle-income investors. It would discourage the use of technology for smaller accounts and create barriers that would prevent the industry from serving these consumers.

NAIFA has previously contributed to letters submitted Sept. 12 and Sept. 19 by a coalition of industry groups. In the current letter, NAIFA asks the SEC to withdraw the proposed rule. We will continue to work with regulators and lawmakers to oppose this SEC proposal, which would harm financial professionals and consumers.