Despite Opposition, Idaho Exempts IAs From Insurance Licensing Requirement

Suzanne Morgan, assistant director of government relations for the national FPA in Washington, D.C., says the group is in favor of adding a CFP exemption to the bill. "They [CFPs] have the competency and training to give advice on insurance issues."

The national FPA pressed forward by contacting the bill's sponsor, but was unable to get the CFP exemption inserted into the bill.

This, however, did not change the position of the national FPA. "We just feel that despite not getting the CFP certificate exemption, we were able to support the bill," she says.

Morgan explains that the national FPA supports the bill because it feels that the investment advisor has a fiduciary responsibility to the client–one that extends to giving advice on insurance products.

"If they [investment advisors] don't feel competent to give advice on insurance then they should refer their client to someone who does," says Morgan.

"That sounds good in theory," says Cooke. "We all have a fiduciary responsibility to not get into areas where we are not competent.

"The theory breaks down when it comes to people that are less than ethical, and that's who the laws are typically written for," he says.

Cooke notes that for most people, relying on fiduciary responsibility would be fine, but there is still a need for laws and regulatory oversight. "Those that are pushing the envelope on ethics or legality are the ones we need to regulate," he says.

As far as making the CFP certification an exemption, Cooke feels that will just open the door for all kinds of other exemptions.

"If you have a CFP exemption, then I want a ChFC exemption–where do you stop?" he asks.

Cooke gives an example of how eventually any advisory designation may want an exemption. He says that during his testimony when the CFP exemption issue came up, one of the members of the senate finance committee said, "I'm a CIC, I want my exemption in there too."

The one concession the house committee granted Cooke, was a promise to revisit the issue next year.

"We're going to hold their feet to the fire and force them to live up to what they said–that they'd hold committee meetings and we'd hammer out legislation," says Cooke.

The legislation has passed both the house and the senate and is currently awaiting the governor's signature.

Reproduced from National Underwriter Life & Health/Financial Services Edition, April 1, 2002. Copyright 2002 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.