DALLAS — The financial services industry would do well to keep advocating against the Department of Labor fiduciary rule, even as it must continue with compliance efforts, a AALU executive said today.
“Today we have to continue to prepare as if nothing is changing,” said Chris Morton, senior vice president for government affairs for the Association for Advanced Life Underwriting. “From a business, perspective we have a lot of risk if we don’t do that.”
Morton led a DOL rule session before a packed room at the National Association of Independent Life Brokerage Agencies (NAILBA) annual conference in Dallas.
While acknowledging that the surprise election of President-elect Donald Trump to pair with an all-Republican Congress is good news, Morton said it doesn’t mean the rule is going away anytime soon.
“There’s a process which the new president would have to go through to make executive changes,” he said. “One of the things that could be done … is some sort of delay of the aplicability date to push it out a year or two years into the future.”
That could give opponents time to put together a stronger repeal effort. In the meantime, the transition stress is likely to mean the status quo for the time being.
“The question is who do you talk to?” Morton said. “There’s been no [DOL] secretary appointed, or undersecretaries.”
The key to strong compliance is “document, document and process, process, process,” Morton emphasized. He urged the audience to keep pressing efforts to ultimately reform or repeal the DOL fiduciary rule.
“We’ve got to preserve the commission-based model,” he said. “We’ve got to preserve options and choice for consumers.”
The rule holds anyone working with retirement accounts to a strict standard of best-interest care. The DOL includes exemptions, notably the Best Interest Contract Exemption, to allow advisors to continue receiving commissions if they adhere to a tough set of regulations.
But the BIC is not “business as usual,” Morton warned. Advisors still need to base commission on neutral factors and compensation must be “reasonable.”
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org.
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