The Insured Retirement Institute (IRI) is urging the Securities and Exchange Commission (SEC) to develop best interest standards of conduct for financial professionals in collaboration with other federal agencies.
Specifically, IRI said the SEC should collaborate with the Department of Labor (DOL), the National Association of Insurance Commissioners (NAIC), and other key regulators to develop “clear and consistent” standards.
“IRI has long supported the adoption of a best interest standard which preserves access to affordable financial advice and a variety of lifetime income products,” IRI Senior Vice President and General Counsel Lee Covington said in a letter to SEC Chairman Jay Clayton. “The SEC should collaborate with its fellow regulators to develop a clear and consistent best interest standard. The DOL’s fiduciary rule is already causing consumers to lose access to financial services, annuities, and other products, as demonstrated by recent IRI research, and therefore should not be used as the starting point for this rulemaking effort.”
Covington laid out a set of guiding principles it would like the SEC to adhere to when developing best interest standards for financial advisors. Among them, IRI suggested that any new standard should only apply to new accounts and transactions entered into after the rule takes effect. Additionally, the SEC should retain control over the interpretation of any new standard. Further, IRI said any new standard should be enforced through regulatory actions or arbitration rather than private litigation.