New broker rules prompted the request
washington bureau chief
The insurance and securities industries have asked the Securities and Exchange Commission for a “reasonable extension” of the October deadline for brokers to comply with new rules governing sales of variable life insurance and variable annuities through financial planners and in discretionary brokerage accounts.
Under the new regulation, a broker-dealer that provides investment and delivers a financial plan to a customer as part of a financial plan or as part of financial planning services must treat the customer under the SEC rules governing investment advisors.
Consumer groups, led by the Consumer Federation of America, Washington, are crying foul. They say it has taken the SEC 5 years to deal with the issue. “If granted, these petitions would further delay the long-overdue application of appropriate investor protections to advisory services offered by brokers,” the CFA and other consumer groups said. The other groups opposed are Fund Democracy, Oxford, Miss.; Consumer Action, San Francisco; and Consumers Union, Washington.