Where Does NAIFA Stand on the SEC Best Interest Proposal?

The Securities and Exchange Commission in April proposed a rule that would establish a best-interest standard of conduct for broker-dealers and registered representatives. The fact that NAIFA was highly instrumental in turning back the flawed Department of Labor fiduciary rule has led to some speculation that NAIFA will oppose to the SEC proposal.

NAIFA supports a best interest standard for advisors and looks forward to providing any assistance we can offer as the SEC refines its proposal. The rule has not been finalized, so NAIFA has not yet taken a position either supporting or opposing it. It is certainly incorrect to characterize NAIFA as the “most visible opponent to the proposed SEC regulation,” as Investopedia recently stated.
We do have concerns about some provisions in the proposal, including how potential restrictions on the use of the term “advisor” could impact the marketplace, but we are hopeful that the SEC will deliver a final rule that benefits consumers and places no undue barriers between advisors and their clients. NAIFA intends to submit detailed comments on the proposed rule.
The SEC proposal is very different than the DOL rule, which before it was vacated by a federal court had already begun to reduce consumer access to retirement planning services and products. NAIFA never opposed the stated goal of the DOL rule to require advisors to work in their clients’ best interests. Our opposition was rooted in the heavy regulatory burdens the rule placed on advisors and their clients and which reduced consumer access to retirement services.
NAIFA members work in communities across the country to help individuals, families, and small businesses meet their financial goals and attain financial security. They often develop life-long relationships with clients. NAIFA believes all advisors should work in their clients’ best interests.
  • Posted July 6, 2018 IN

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