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NAIFA Members: Serving Main Street Investors | NAIFA

NAIFA Members: Serving Main Street Investors

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Comment on NAIFA's new surveys and on the issues important to NAIFA Members on The NAIFA Blog.

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Main Street investors, also known as middle-market investors, represent a core client base of NAIFA members. These investors have a need for the services provided by broker-dealers and registered representatives. Added regulatory burdens could limit the ability of NAIFA members to serve them.

NAIFA and The American College of Financial Services surveyed 2,419 financial professionals from May 20-29, 2013, aiming to learn more about possible impacts on Main Street investors should the Securities and Exchange Commission impose a uniform fiduciary duty on advisors. We found that 84 percent believe an SEC fiduciary standard would increase their cost of doing business. At least some of this cost increase would have to be passed along to consumers, said 77 percent of respondents. An expanded fiduciary duty could have a broad range of impacts on consumers. Nearly half of the advisors (48 percent) said they would need to impose minimum account balances on clients if their costs increased by 15 percent. Additionally, 44 percent said they would impose or increase fees on clients, 18 percent said they would implement a fee-only business model and 10 percent said they would stop selling securities products. (Respondents could choose more than one response.)  

The newest survey results bolster the findings of a 2010 survey conducted by LIMRA International on behalf of NAIFA. In that survey of NAIFA members, most respondents felt that an imposed fiduciary standard would increase their compliance costs. Most of the NAIFA members surveyed said that increased regulation would not offer any real benefits to clients, because advisors are already heavily regulated and they currently do the best they can for their clients. The resources below explain both surveys in greater detail and provide key findings.

2013 NAIFA-American College Survey Resources

Main Street Investors Resources