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December 09, 2011 at 09:05 AM
Securities and Exchange Commission chairman Mary Schapiro is signaling that the concerns of captive insurance agents will be addressed in a regulation imposing a fiduciary standard on the sale of investment products.
In an interview with Bloomberg News, the substance of which was confirmed by her office, Schapiro said that the regulation, when published for comment in the near future, will be “business-model neutral.”
The National Association of Insurance and Financial Advisors (NAIFA), which has been lobbying the issue fiercely, appeared to welcome Schapiro’s comments.
In a statement, Robert Miller, NAIFA president, said the trade group “shares Chairman Schapiro’s view that a new standard of care rule should respect the business differences between investment advisers and broker-dealers.”
Miller said that, on average most NAIFA members serve investors with household incomes of less than $100,000 per year.
“Therefore, our fundamental concern is that the potential additional costs and increased potential for liability of applying a ‘one-size-fits-all’ fiduciary standard of care to the broker-dealer business model could result in middle market investors having less access to affordable financial services that are currently being delivered by our members.”
Schapiro also said that the Dodd-Frank Act provision which gave the agency the authority to impose a fiduciary standard permits the SEC to protect clients without imposing a blanket ban on certain brokerage activities, such as the sale of a limited range of investment products provided by a specific broker-dealer.
