Do No Financial Harm

May 25, 2022

As Washington D.C. officials consider imposing a regulation that would cut off access to financial professionals for millions of moderate-income Americans, a new survey confirmed that Americans strongly value recommendations from financial professionals and oppose government regulation that would jeopardize access to them.

Indeed, Greenwald Research found that 85 percent of survey respondents have at least a somewhat great need for financial guidance from a professional. More than 80 percent feel people should have access to financial professionals paid in a variety of ways. And nearly 60 percent believe that when government regulators seek to dictate how professionals get paid, it usually does more harm than good.

All Americans should have the right to learn about and choose from the many different options available in the marketplace to protect their family’s financial future. Unfortunately, the Department of Labor is considering a regulation that would limit access to these choices.

The DOL’s proposal would resurrect a discredited fiduciary-only approach that was struck down by a federal court in 2018. Limiting consumers to fiduciaries would curtail opportunities for moderate-income retirement savers to receive help from financial professionals who receive one-time commissions. Fiduciary advice would only be available for Americans already possessing sizable savings and willing to fork over ongoing service fees.

Americans have been hit by a financial double whammy with a soaring inflation rate and a plummeting stock market. Now more than ever, Americans need to have access to the knowledge and tools they need to help protect their family’s financial future. They also need access to the only private-market source of guaranteed income for life – annuities.

The Greenwald survey noted that 71% viewed the guaranteed lifetime income from annuities as valuable and expressed strong interest in these products. Since annuities are sold on a commission basis, a fiduciary-only regulation would make this product unavailable to retirees who could benefit from them.

Financial protections shouldn’t limit financial options. Moderate-income families need to retain access to financial professionals who can help them navigate through tough economic times and plan for the future. The federal government must not make it more difficult for hard-working American families to achieve financial security.

Andrew Melnyk

Andrew Melnyk is Vice President, Research and Chief Economist at the American Council of Life Insurers (ACLI). He holds a doctorate in economics and is a Certified Business Economist. His functions at ACLI include authoring white papers; managing the production of statistical publications; and managing ACLI’s Research Department. Prior to joining ACLI in 2005, he held positions in academia, government, and the private sector, both in the U.S. and abroad.