NAIFA Submits Formal Comments to SEC on Fiduciary Study
Individual and Joint Comments Submitted
FALLS CHURCH, VA (August 30, 2010) — In comments submitted today to the Securities and Exchange Commission on the issues surrounding the Commission’s forthcoming study on the standards of care governing broker-dealers and investment advisers, the National Association of Insurance and Financial Advisors said its members have a history of serving their clients “ethically and in their best interests (to) ensure a vigorous level of investor protection that rivals any new standards that may be put in place.”
In its comments, NAIFA said: “We encourage the Commission to recognize that most of our members are community-based small business owners, many working as sole practitioners, who provide affordable insurance and financial services to the middle-market. In doing so, our members currently adhere to significant compliance requirements that provide an abundance of upfront investor protection through adherence to and vigorous enforcement of various rules imposed by FINRA, and, in turn, implemented by broker-dealers.”
NAIFA outlined that its members spend a great deal of time and resources complying with a myriad of state and federal regulations that seek to ensure they are sufficiently trained in the products they sell, that they are appropriately licensed, and that they only recommend to their clients courses of action that are appropriate for their clients’ needs and objectives. NAIFA stressed that before any new regulations are promulgated, careful consideration be given to the impact such requirements would have on its small business members and the middle-market investors they serve.
In addition, NAIFA submitted a joint letter with other industry associations to urge the SEC to “take this opportunity to perform a rigorous analysis of the applicable existing regulatory regime, identify those things that are working well and those that are not, and evaluate the likely consequences to the retail and other investing public and the industry from any potential changes. This is in keeping with the goal of better protecting retail customers and other investors without unnecessarily increasing costs and/or reducing investor choice and access to important personalized investment advice about securities.”
The SEC invited comments from industry groups by Aug. 30. NAIFA’s formal comments are in addition to the hundreds of comments posted to the SEC website by NAIFA members, the majority against instituting a fiduciary standard on broker-dealers and their registered representatives.
About NAIFA: NAIFA comprises more than 700 state and local associations representing the interests of approximately 200,000 agents and their associates nationwide. NAIFA members focus their practices on one or more of the following: life insurance and annuities, health insurance and employee benefits, multiline, and financial advising and investments. The Association’s mission is to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members.