Trade Group Criticizes SEC Disclosure Proposal

But consumers already get the same information from a variety of sources, Wilkerson writes.

“In addition to the point-of-sale document, consumers also receive a prospectus, a variable contract, buyers’ guides, NASD-approved sales literature and replacement disclosure forms when a replacement is involved,” Wilkerson writes.

Wilkerson adds that the SEC has not shown a regulatory need for the proposed new disclosures, and that the research conducted by the SEC to demonstrate the need for added disclosures did not cover variable insurance products. None of the 33 consumers that the SEC interviewed while studying the proposed rules had a variable annuity or variable life insurance policy, Wilkerson writes.

But a consortium of consumer groups is praising the SEC’s disclosure proposal.

“Information that is relevant to the selection of the financial professional, including information about the practices they engage in that create conflicts of interest, should be required to be provided prior to the engagement, as it is for investment advisors,” the consortium, which includes Consumers Union, Yonkers, N.Y., writes in its comment. “Information relevant to the purchase of a particular product?including but by no means limited to information about distribution related costs and financial incentives that may influence the product selection?should be provided at the point when that purchase is recommended.”