The National Association of Insurance and Financial Advisors says it is happy with the final standard-of-care provision in the Senate’s version of H.R. 4173, the Wall Street Reform and Consumer Protection Act.
Members of the Senate voted 59-39 Thursday to approve the bill, which previously was known as S. 3217, the Restoring American Financial Stability Act.
NAIFA, Falls Church, Va., has been battling financial planner groups over a section that could have required all providers of personalized investment advice to use a fiduciary standard of care.
Federal law now requires financial planners and other investment advisors to use a fiduciary standard, meaning that they must guard against conflicts between their own interests and those of their clients.
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Broker-dealers, and life insurance agents licensed as representatives of broker-dealers, must abide by a suitability standard, which requires them to verify that the products sold to a consumer suit the needs of the consumer.
Life agents have argued that a poorly written fiduciary standard could be particularly onerous for life agents, because they often have contracts limiting them to selling products from one company, or a few companies, and cannot offer advice free of all potential conflicts of interest.