NAIFA CEO Appears on PBS Newshour in Segment on DOL Proposal

NAIFA CEO Kevin Mayeux was featured in a PBS Newshour segment on the Department of Labor’s proposed best interest regulation. (Mayeux’s remarks begin at 3:45 into the report.) While the overall tone of the item may have leaned in favor of the DOL proposal, Mayeux was able to defend advisors who have seemingly been under siege by proponents of the rule.
 
“Financial advisers that are successful are constantly acting in the best interests of their clients, because, if they weren’t, they wouldn’t be in business anymore,” Mayeux said.
 
Mayeux also pointed out some of the problems the unworkable proposal will create.
 
“There is already ample opportunity to discipline bad actors,” he said. “And the cost of complying with a complex federal regulation that is 1,000 pages in length is just going to make it prohibitive for companies to put their advisers on the street to help clients and for advisers to be able to access clients to give them an array of options from which they can choose.”
 
Unfortunately, Labor Secretary Thomas Perez, also quoted on the program, still seems to view professional advisors as mere salespeople.
 
“Under the current standard, which is a so-called suitability standard, I can have four or five different products that are so-called suitable for you,” Perez said. “And what happens? Well, the product that generates the most commission for the salesperson is the product that invariably gets sold. And so the consumer loses, and the salesperson wins.”
 
The secretary takes a very cynical view and ignores the fact that the business of professional advisors is built upon nurturing relationships with clients, not merely completing transactions.

"That's an unfortunate statement," said NAIFA President Jules Gaudreau. "I win when my clients win. If they're not happy, they are not going to continue doing business with me."
 
NAIFA leaders and members have clearly and repeatedly made this point in meetings with DOL officials, comment letters and DOL and congressional hearings.
 
Unfortunately, the secretary’s comments show that the message seems to have fallen on deaf ears.  
 
NAIFA has had more success getting the message to members of Congress. Personal contacts by NAIFA-member constituents, including a recent Day on the Hill and last spring’s Congressional Conference, as well as congressional testimony and responses to NAIFA’s GovAlert have helped members of Congress from both sides of the aisle understand how the DOL proposal would disrupt advisor-client relationships and harm consumers.
 
A bipartisan group of representatives supports a bill that would bolster consumer protection without imposing the unworkable burdens of the DOL proposal.
  • Posted December 16, 2015 IN
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Comments
Blake Amick
Mr. Perez's comments reflect the standard this administration operates under. If it is better for the administration's objectives that is what they pursue. In 38 years in this business the commission has never entered into the decision. Always about what is best for the client, even if it means doing business somewhere else. Obviously they haven't worked with true professionals before or their continued cynical attacks would stop!
12/17/2015 5:22:00 PM