Three financial services industry trade groups are signaling to the Department of Labor (DOL) that they will fight tooth-and-nail to sustain the current exemption of the sale of retirement investment products from a fiduciary standard.
The letter was signed by officials of the Insured Retirement Institute (IRI), the Financial Services Roundtable (FSR) and the Securities Industry and Financial Markets Association (SIFMA).
It implied that there would be dire economic consequences for both the industry and investors if a fiduciary standard was imposed on the sale of investment products in retirement accounts under the Employee Retirement Income Security Act (ERISA).
The National Association of Insurance and Financial Advisors (NAIFA) is also part of the industry coalition involved with this issue.
Robert Miller, NAIFA president, said in an interview with the National Underwriter earlier this week that NAIFA members played a key role in the successful effort last September to have the DOL withdraw the original rule.
He said NAIFA members did so by lobbying members of Congress about the potential harmful effects of imposing a fiduciary standard on sale of retirement products.
This was before the IRI, SIFMA and the FSR sent the latest letter.
Miller said NAIFA is girding up to renew its opposition because DOL officials have indicated that a revised rule would likely still contain a provision imposing a higher sales standard on retirement products sold in accounts regulated by ERISA.
In mid-February, NAIFA sent a similar letter to the DOL indicating that it could not provide the data requested by DOL because of privacy concerns voiced by its members.
In comments today, Miller rejected complaints from consumer groups that industry trade groups were not providing the data as part of their effort to thwart the DOL's efforts to impose the fiduciary standard on sale of investment products.
"We have been forthcoming with all of the data we have," Miller said.
He said that in NAIFA's case, "the LIMRA survey we conducted in late 2010 provides a wealth of information, including 41 percent of our members who deal in securities are 'dual-registered' as both registered representatives and as investment advisers under the Investment Advisers Act of 1940."
He said the LIMRRA survey also found that, on average, 77 percent of a NAIFA members' income comes from commissions, 8 percent from salary, 11 percent from assets under management and/or planning fees, and only 4 percent from bonuses and reimbursements.
