Statement from NAIFA President-Elect Jules Gaudreau on the Anticipated DOL Proposal to Define Who Is a ‘Fiduciary’

NAIFA members provide guidance to consumers about their retirement investments, including investments in IRAs, 401(k) accounts, and other assets invested to produce retiree income. NAIFA is concerned that a rule that would endanger the business model that has allowed NAIFA members to successfully help their middle-market investor clients for decades would very possibly harm the people it is designed to protect.
“While we have not seen the new proposed rule, the White House report states commission based compensation models create inherent conflicts of interest. Wrap fees don’t serve all clients well, and charging fees for assets under management can also create conflicts of interest. The bottom line is there is no one size fits all approach that will work for all investors. Based on the recent assertions by the Administration, we believe the likely result of the pending DOL regulation will be that professional investment guidance for retirement savings will become more expensive or not available at all for small accounts or individual plan participants. Middle- and lower-market investors would have a hard time finding wealth managers willing to work with them and they would be left without any professional guidance to secure their financial future.
“NAIFA members are highly regulated under the suitability standard of care. Suitability, as enforced by the Financial Industry Regulatory Authority (FINRA), is a very robust standard, governed by no fewer than six FINRA rules and more than a dozen Regulatory Notices and Notices to Members.
“As the OMB reviews this proposal, NAIFA strongly advises that any new DOL rule protect the ability of millions of Americans to continue to receive low cost investment guidance about their retirement accounts. Congress also needs to ensure that  the SEC and DOL rules do not create conflicting standards for those offering investment information or advice.”
  • Posted February 23, 2015 IN
  • Comments (1)

Christopher Kelly
Will this Help or hinder the Vast majority of Americans who don't have enough to Retire? It looks like Hinder Due to Less opportunities for Small Retirement planning. Maybe the Money not saved for retirement will help the Economy look better today?
2/24/2015 12:53:45 PM