Who will manage the government’s conflicted interests in implementing the DOL’s Fiduciary Rule?
The DOL promoted – by name – certain investment providers during the pitch for the initial DOL rule. Financial firms have hired and contracted agency leaders after their work in government (CONFLICT!).
The government has hosted these firms to ask for their advice on ‘where to spend government resources in financial tech’ (CONFLICT!). Note – many of these firms have less than a decade of experience, and only rose to where they were due to selling their product in the market of ideas with NO government support or interference.
The DOL has proposed a rule to exempt Equity Indexed Annuity (EIA) providers. In their posted reason, they claim these products provide growth and safety. As an independent fiduciary who has specialized in investment management and annuities, I have never seen an EIA that is competitive – nor, have I met a fee-only, independent advisor who recommends them (CONFLICT!).
In order to receive an exemption, it appears the EIA industry has a few ways they can go. At least one of those ways would result in fees to government agencies (CONFLICT!).
I’ve been disappointed in NAPFA’s silence on the EIA exemption and other issues that impact current members. I plan to address that more in a future post, but I joined NAPFA to promote independent, fiduciary advice.
If NAPFA is unwilling to lead against giving exemptions to groups that have caused perhaps the most consumer harm that I have come across, or at least simply stand up for its own members, it is vastly overestimating its benefits to future firms. Throughout my decade as a member I’ve seen an organization that once promoted its message with the public, downgrade public outreach, and increase government outreach. Like others firms I've heard from, I am an independent advisor, and only a member of groups that support me in expanding the message of fiduciary advice for all, no exemptions or exceptions.
The public (and I assume current and future members) want a group that leads in the market of ideas based on core principles, and doesn’t bend on those principles to advance government relationships.
What kind of agency listens to some of the worst offenders of 'conflicted advice' in EIA salespersons, and writes into a law an exemption for them?
Why isn't there a group fighting for the interests of the best fiduciaries?