Richard Choi, a partner in the law firm Carlton Fields in Washington. Richard Choi, a partner in the law firm Carlton Fields in Washington.

Richard Choi’s favorite winter pastimes are hitting the slopes and shooting sporting clays, but he was too busy in mid-January helping the Insured Retirement Institute craft a comment letter to the Securities and Exchange Commission on the agency’s variable annuity summary prospectus proposal to relish in such pleasures – as of yet.

A partner in the law firm Carlton Fields in Washington, Choi’s been spending his days advocating for clients before the SEC as well as talking to CEOs and other executives about the regulatory challenges around the bend – namely fiduciary-type standards from the Labor Department and SEC – and penning comments to the securities regulator on a long-awaited VA summary prospectus.

Choi and IRI hope that the VA summary prospectus will be adopted later this year.

The layers of supervisory work, cooperation and input by multiple supervisors across the federal and state system for potential new best-practices standards for the sale of annuities and other investment practices after the collapse of the now-defunct Obama-era fiduciary rule “will be a heavy lift,” Choi admits.

(Related: More States Advance Their Own Fiduciary Rules)

Practicing law for more than 30 years, with degrees from University of Chicago and University of Virginia, Choi focuses his practice on regulatory, compliance and transactional matters involving registered and unregistered insurance products, mutual funds, investment advisors and broker-dealers.

When not busy helping clients, Choi also serves on the advisory board of the Smithsonian Libraries and plays with his granddaughter, Hailey, age 5.

Choi talked to ThinkAdvisor recently about the upcoming regulatory landscape for advisors and broker-dealers in the new year. The conversation has been edited for clarity and length.

ThinkAdvisor: The SEC proposed last October a variable annuity summary prospectus. Dalia Blass, director of the SEC’s Investment Management Division, said in November that she wanted to “future-proof” the rule.” What will you be advising clients on this proposal as they take to the whiteboard? When do you expect a final rule?

Choi: Dalia and the SEC staff deserve a lot of credit for getting the summary prospectus proposal through the SEC. I worked on the original rulemaking petition submitted by the Insured Retirement Institute over 10 years ago, and the industry and the SEC staff have been working closely on that initiative ever since.

My clients are thrilled at many of the forward-thinking ideas that the staff has included in the proposal. We are actively working on comments to take Dalia up on her invitation to future-proof the rule. I remain hopeful that the final rule will be adopted by the fall this year notwithstanding the partial government shutdown.

ThinkAdvisor: What are the most challenging or urgent issues of the year before federal regulators or from a federal agency, and why?

Choi: Finalizing the standard of conduct rule for broker-dealers [known as Regulation Best Interest] will continue to be one of the biggest challenges for the SEC. Doing so will involve addressing many moving parts, such as competing business models (advisor vs. broker-dealer), different industries (mutual funds vs. insurance), different regulatory schemes (SEC vs. DOL vs. state regulation), and different constituencies (consumer advocates vs. business advocates).

I’m grateful that the SEC jumped into the fray with its own proposal in light of the debacle with the now-defunct Labor Department fiduciary rule and various state initiatives, but getting it right will be a heavy lift.

ThinkAdvisor: What are your clients finding most concerning or most time-consuming in terms of ongoing compliance, and what are they most worried about in the future?

Choi: In terms of process, getting to market with new financial products and services and resolving regulatory issues both require the involvement of the SEC staff, so the longer the partial government shutdown goes the more concerns there will be about working things through the SEC in keeping with the business objectives for the year. In terms of substance, regulatory uncertainty around the standard of conduct makes planning for the future difficult.

Other areas of concern include the cost and other burdens associated with duplicative or inconsistent regulatory requirements. For example, the states increasingly seem to be moving to adopt “best interest” type regulations that may not accord with what the SEC and DOL ultimately adopt. The preferable course would be for the states to work through organizations such as the NAIC to achieve a consistent regulatory approach.

ThinkAdvisor: What do you see happening in 2019 with the Labor Department’s fiduciary-related measures and how they will sync up with the SEC and state insurance regulators’ frameworks? The National Association of Insurance Commissioners is working on revising its Suitability in Annuity Transactions Model Regulation this year.

Choi: I expect that the Labor Department will coordinate with the SEC on its rulemaking. What’s less clear is how the federal agencies will coordinate with state regulators. The New York Department of Financial Services has already adopted a rule that imposes different requirements.

Apart from the obvious inefficiencies, regulatory conflicts will drive companies and individual participants away from the marketplace. The NYDFS has already been sued. I expect that the SEC and DOL will do a better job in striking the proper balance so as to avoid court challenges.

(Related: More States Advance Their Own Fiduciary Rules)