Consumers Harmed by the PRO Act
Market volatility sparked by the coronavirus pandemic has prompted 1 in 4 Americans to seek the help of a financial professional for the first time.
That’s a wise move. Financial professionals have the experience and knowhow to help families make vital decisions on how to protect their loved ones through all stages of life. Now more than ever, American families need access to the services and expertise that financial professionals can provide.
Unfortunately, the ability of financial professionals to help American families is jeopardized by the passage of H.R. 842, The Protecting the Right to Organize (PRO) Act. This legislation seeks to change the definition of “independent contractor” in a way that would significantly disrupt the independent financial services model and limit options for American families.
Currently, financial professionals have many ways to help workers build secure financial futures. Many professionals prefer to run their own businesses as independent contractors. This gives them the freedom to build relationships with multiple insurance companies, broker dealers, or registered investment advisers. Consequently, they can offer a wider variety of products and services to their customers.
By effectively reclassifying these independent contractors as employees, the PRO Act would create unintended consequences, especially for insurance producers and independent financial advisors. These individuals are crucial to ensuring that Americans have access to the important advice, products and services necessary to achieve their financial goals and protect their families. The PRO Act’s “ABC test” could eliminate the choice that a majority of financial professionals have made to serve clients independently. That could dramatically reduce their clients’ ability to access high quality advice and products for their insurance and retirement security needs.
Ensuring that financial professionals can continue to serve their communities’ financial needs is imperative and something that lawmakers should work to preserve, not erode through the ABC test. Financial professionals should be exempt from the ABC test so they can continue to safeguard the financial security for 90 million American families.