Why Doesn’t NAIFA Think Advisors Should Work in Their Clients’ Best Interests?

By Juli McNeely

Straw man  n.  1: a weak or imaginary argument or opponent that is set up to be easily defeated.
Merriam-Webster Dictionary (online)
As president of the National Association of Insurance and Financial Advisors, I have stated numerous times that the Department of Labor’s proposed fiduciary rule for retirement investment advice is unworkable. The proposal would confuse investors, increase costs, harm advisor-client relationships and interfere with the ability of advisors to serve retirement investors. Not surprisingly, I have also said that NAIFA is opposed to the proposed DOL rule in its current form.
Supporters of the proposal have somehow interpreted this to mean NAIFA is opposed to advisors working in clients’ best interests. Let me assure you, nothing could be further from the truth.

Building the Straw Man

Here’s just one recent example from a blog post by Drew Voros, editor of ETF.com:
The report from InsuranceNewsNet.com contained this beauty of a quote: “The rule as currently proposed is unworkable for advisors and their clients,” said National Association of Insurance and Financial Advisors President Juli McNeely. 
That’s right, according to McNeely, it is not in the client’s interest for an advisor to put that client’s interest first. Apparently, she said that with a straight face.
I hope everyone recognizes this as a classic straw man tactic. Mr. Voros grossly misinterprets my statement in a way that makes it easy for him to dismiss. I believe I did have a straight face when I made the comment, but I’ve chosen not to simply grin and bear his misleading interpretation.

Much More Than “Best Interest”

The DOL proposed rule fills 115 pages in the Federal Register. Its regulatory impact analysis is 250 pages long. Supporting documents add hundreds of additional pages to the tally. Obviously, there is much more to the proposal than simply stating that advisors need to work in their clients’ best interests.
NAIFA has detailed many of the proposal’s unworkable provisions elsewhere. If you are not familiar with how the rule will impact advisors and retirement investors, I encourage you to read:
Several of my NAIFA colleagues and I have met with DOL officials to discuss how the proposal would affect our clients. Even DOL Secretary Perez has acknowledged that there are unintended consequences in the current draft and has asked for input. NAIFA will submit comments suggesting revisions to remedy many of the proposal’s problems. We have also encouraged Congress to look at the issue. Among several legislative options, NAIFA would prefer legislation that would protect the best interests of clients without imposing the burdens and confusion that the DOL rule would create.

Serving Clients’ Best Interests

I hope it is obvious that I can voice opposition to provisions in a complex regulation without being against the concept of putting my clients first. My clients, many of whom I have worked with for a dozen years or more, know that I have their best interests at heart. Otherwise, they would no longer be my clients.
But to be crystal clear, I’ll put this in bold letters for the benefit of Mr. Voros and others who have similarly mischaracterized NAIFA’s strong concerns with the DOL proposal: As an advisor who works hard to gain the long-term trust and approval of my clients, I believe it is always in my interest to work in the best interests of my clients.
It helps me retain clients and it is the right thing to do. It’s the way I have approached my profession for nearly 20 years. It is something I know my NAIFA colleagues also do and will continue to do no matter what the DOL’s final rule says – assuming, that is, the rule does not prevent us from serving our middle-income clients altogether.
  • Posted June 30, 2015 IN
  • Comments (3)

Mark Miller
The DOL's fiduciary proposal is merely the most recent in the onslaught of regulatory hammers the current administration has dropped on many industries in our country. Ours just happened to be next on the list. If you are a NAIFA member reading this, and if you haven't already done so, please ... go recruit a nonmember to our ranks.
7/2/2015 11:37:56 AM
joseph cianchetti
There's one reason for these rules and one reason only, in my opinion. It's to run as many good hard working agents out of business as they can. This way there will be more and more folks turning to the Federal Govt. for their financial needs. In turn this will create new voters that will fear benefits being cut.
7/1/2015 11:09:47 AM
Chal Daniels
Thanks Julie for your thoughts! As an advisor who works as a Registered Investment Advisor AND a Registered Representative, I understand the complexities of the DOL Proposal. As a business owner, I have to ask; 'Who doesn't try to work in the best interest of their client?' Isn't that how you stay in business?
7/1/2015 11:04:49 AM