Big “I” Commends House for Addressing Fiduciary Duty Expansion
Pro-consumer legislation would allow continued access to professional financial advice.
WASHINGTON, D.C., Oct. 29, 2013 – The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) today commended the U.S. House of Representatives for passing, in a 254-166 vote, H.R. 2374, the “Retail Investor Protection Act,” by Rep. Ann Wagner (R–Mo.). This bill aims to reform efforts by the Obama Administration to expand the fiduciary duty to broker-dealers.
“The Big ‘I’ supports Rep. Wagner’s bill as it would address misguided and disjointed regulatory efforts by both the SEC and DOL that would unnecessarily lead to increased liability and compliance costs for many independent insurance agents,” says Charles Symington, Big “I” senior vice president of external and government affairs. “The downside of an expansion of the fiduciary duty would far outweigh any perceived benefits, as it would likely lead to restricted consumer access to sound investment advice.”
At issue are moves by the U.S. Department of Labor (DOL) and the Securities and Exchange Commission (SEC) to write two separate rules on investment advice provided by broker-dealers and investment advisers. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) grants authority to the SEC to expand the fiduciary standard currently applied to investment advisers to cover broker-dealers for retail investing. The DOL has jurisdiction over workplace retirement plans and individual retirement accounts.
H.R. 2374 would require the DOL to wait 60 days after the SEC finalizes any fiduciary rule before issuing its regulation. The measure would also require the SEC to complete several important steps before issuing its rule, such as determining that any rule would not harm consumers or restrict their access to investment advice, as well as completing a cost-benefit analysis.
“The Big ‘I’ supports Rep. Wagner’s bill as it provides important checks and balances on a flawed rulemaking process,” says Ryan Young, Big “I” senior director of federal government affairs. “H.R. 2374 provides a necessary fix that will ultimately protect agents and the millions of consumers they serve.”
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of approximately a quarter of a million agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products. Web address: www.independentagent.com.