Passed on July 15, the Dodd-Frank Wall Street Reform and Consumer Protection Act set forth several game plans for whipping the financial services industry into shape. One of the most hotly contested sections dealt with the possibility of a fiduciary standard for brokers and agents dispensing investment advice. Whether this would extend to insurance advisement is unclear, though it most certainly would include variable annuity sales.
Essentially, the legislation gave the SEC the authority to recommend a fiduciary standard after preparing and submitting a study to Congress that examines any gaps or redundancies in the standard of conduct and supervision of brokers, dealers, and investment advisors who offer personalized investment advice about securities to retail customers. The Dodd-Frank ACT also included incentives for states to begin investigating and cracking down on the abusive use of financial designations and titles.
Both of these provisions essentially call for more investigation, and the GAO has recently recommended that the SEC and NAIC seek public opinion as part of that investigation.
