Advisors use their expertise and persuasiveness to help protect consumers from potentially harmful laws and regulations.
I nsurance and financial advisors offer products and services that provide 75 million American families with financial security. These skilled professionals are on the front lines with people planning for retirement, working to attain financial goals or facing setbacks due to illness, disability or the death of a loved one. Advice, planning, products and services are the most obvious benefits advisors offer.
But advisors who are politically involved provide an additional service to their clients, one that many of those clients probably never consider. Politically involved advisors use their expertise and persuasiveness to help protect consumers from potentially harmful laws and regulations.
“As advisors, we have strong, long-term relationships with our clients,” said NAIFA President Jules Gaudreau. “This is very personal to us. We know the real-world issues clients face as they prepare for retirement and work to provide financial security for their families. We can explain to Congress and regulators how government decisions will impact these plans. We are working just as much in our clients’ interests when we are advocating in Washington, D.C., as when we are going over financial options with them back home.”
The Clients’ Best Interests
A case in point is the Department of Labor’s fiduciary rule. As it was proposed, the rule was unworkable for advisors and their clients. It would have placed impossible requirements and restrictions on financial professionals, would substantially increase costs for consumers and would leave many retirement investors without access to personalized services and advice. It threatened to tear apart beneficial advisor-
client relationships that had existed and thrived for years or even decades.
“We knew the DOL rule was bad, and it had the potential to devastate our business and large segments of our client base,” Gaudreau said.
Making changes to the rule became a primary grassroots lobbying focus of NAIFA members. They wrote tens of thousands of letters to the secretary of labor and to their representatives in Congress, explaining how the rule could harm their clients and other consumers who need financial advice.
Nearly a thousand advisors, representing every state, visited their representatives and senators on Capitol Hill as part of NAIFA’s 2015 Congressional Conference. They told lawmakers personal stories from the perspective of their clients, many of whom are small-business owners and medium- and small-scale investors. They also used their personal relationships with lawmakers as well as meetings in their home districts to advocate on their clients’ behalf.
NAIFA staff, leaders and members engaged regulators and lawmakers in more than a dozen official hearings, briefings and meetings. NAIFA Past President Juli McNeely and a client of hers who owns a small business testified at a DOL public hearing, giving officials direct insight into how the proposal would have affected consumers.
In the end, all of this grassroots activism had some success. The final rule, issued by the DOL in April, contains numerous revisions that remove or soften restrictions and requirements that would have harmed client relationships.
“The rule is much better for advisors and our clients than previous versions,” Gaudreau said. “But it is very complex, and some parts of it remain troubling. This is something NAIFA is watching very closely, and we are poised to ramp up our advocacy on behalf of our members and consumers if provisions of the rule need to be addressed.”
Advisors look out for their clients’ best interests on a daily basis. This is most apparent when a well-prepared retiree is able to maintain a high standard of living throughout their lifetime or when a family is able to remain financially secure after a breadwinner’s death.
Behind the scenes, though, there is a contingent of advisors working more subtly to address laws and regulations that could derail these financial plans. They, too, will be working in their clients’ best interests in ways that most people may never realize.
Mark Briscoe is senior director-strategic communications at NAIFA. Mark may be contacted at firstname.lastname@example.org.