The major obstacle the industry faces is one of perception; namely, can insurers and agents that provide products to plans also give unbiased investment advice?
Typical of this kind of objection is an example given by Duane R. Thompson, director of government relations for the Financial Planning Association. In this example, he cites a situation where an advisor could encourage plan participants to select investment options in a firm's proprietary mutual funds in which the firm and the advisor typically earn higher fees than from other suitable investment options.
Thompson says such risks can be minimized by restricting the ERISA exemptions in H.R. 2269 to advisors registered with the Securities and Exchange Commission or their home states.
But David Winston, vice president of government affairs for the National Association of Insurance and Financial Advisors, rejects such arguments as a "self-serving attempt by one sector of the financial services industry to monopolize the market, and limit competition and choice, for providing services to employees in connection with their retirement plans."
We agree with Winston and urge the industry to maintain unity in countering slights to its integrity.
Reproduced from National Underwriter Life & Health/Financial Services Edition, August 6, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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