An intense effort to create a uniform fiduciary standard remains unresolved after more three years of effort, something insurance agents and investment advisors should be concerned about.

The only thing that is certain from all this effort is that two terms have been added to the lexicon governing the appropriate standard for securities oversight going forward: “business-model neutral” and “economic impact analysis.”

“Business-model neutral” is shorthand for the position advocated by the National Association of Insurance and Financial Advisors.

According to NAIFA vice president of securities and state government relations, Gary Sanders, NAIFA has been concerned from the beginning that imposing a universal fiduciary duty of care on broker-dealers and their registered representatives would make it difficult or even impossible for such advisors to serve the middle market investors.

He feels that NAIFA’s members help protect the financial well-being of countless Americans and that mid-market investors would be harmed if they were left without access to financial products and professional advice and service due to the unintended consequences of a poorly crafted standard of care rule.

But the industry is divided because, unlike insurance agents, investment advisors (many of whom get paid by commission) support the fiduciary standard.

The economic impact analysis issue is also divisive. Both the Securities and Exchange Commission and the Department of Labor are paying particular attention to this because an SEC rule implementing a proxy access standard was thrown out by a panel of the U.S. Court of Appeals for the D.C. Circuit, which said the potential impact on capital formation and competition was not extensively weighed by the agency in the rule.

When asked to provide data to the Department of Labor on account-level IRA data, both NAIFA and the Financial Services Institute declined to respond with substantive information.

NAIFA sent a letter Feb. 17 to the DOL saying that it was not feasible for the group to obtain any of the data enumerated in a Dec. 15 data request. NAIFA went on to say that the relationship of its members and affiliated companies is such that even if the association members could get access to client or company data, they probably would not have the legal right to share it.

The Financial Services Institute sent a similar letter of its own to the Department of Labor, saying that its ability to provide data to the DOL is very limited.

Meanwhile, Securities and Exchange Commission chairman Mary Schapiro made it clear in her comments at a Feb. 24 legal seminar that the issue remains on the front burner for the agency, noting that she still strongly believes that putting brokers under a fiduciary mandate “is the direction that we need to go in.”

She also confirmed that economists and staff at the SEC who are responsible for performing a more detailed cost-benefit analysis on the agency’s fiduciary rule will soon ask the public to weigh in on a set of questions regarding the agency’s economic analysis.

Industry officials believe that request will be made within 30 to 45 days.

Barbara Roper, director of investor protection for the Consumer Federation of America, doesn’t believe the issue will be resolved this year.

Given everything that the agency has on its agenda, she said, it is all but guaranteed that there will be no final rulemaking on this issue before the election. There simply is not enough time, and the agency is overwhelmed by other responsibilities. She noted that conducting a detailed economic analysis is a necessary, if frustrating, step. Better to get it right, she said, than to push out a rule that gets overturned in court.

Roper contends that the DOL situation perfectly illustrates the hypocrisy of industry’s argument for more extensive cost-benefit analysis. The industry, she explained, insists that the agency needs to do more to study the economic costs of its proposal, and then refuses to provide the data that would allow the agency to conduct that analysis.

NAIFA officials, however deny any unwillingness to participate. Lillian Vogl, NAIFA counsel, federal government relations, noted that it responded to DOL’s request within three days of receiving it, which she added was about as quickly as was humanly possible.

“We are not stalling in any way. We are committed to do everything we can to help the DOL thoroughly understand the impact of any rule it imposes,” she said.

At the same time, however, a merry-go-round that has now been on the front-burner for four years should be resolved. Compromise with the agencies designed to bring certainty to those involved and credibility by industry with customers should drive a prompt resolution.