The American Council of Life Insurers (ACLI) believes strongly in a best interest standard of care for all financial professionals.
Fortunately, so does the Securities and Exchange Commission (SEC).
The SEC introduced a strong standard of care in June when it unveiled its Regulation Best Interest (Reg BI). Reg BI is a robust measure that will protect consumers. It will also preserve their access to financial advisors that sell annuities, the one product that provides guaranteed lifetime income.
People planning for retirement deserve good advice, and to choose the type of advice they get and how they’ll pay for it. Reg BI preserves that right for consumers while also providing them with key protections.
For example, Reg BI:
Some critics of Reg BI falsely contend that the regulation will not do enough to protect consumers. This criticism is misguided. Broker-dealers must comply with specific obligations to ensure they are acting in the best interest of their customers. If they fail to meet any of these obligations, they will be subject to enforcement actions.
Reg BI is much better suited for consumers than the Department of Labor’s flawed fiduciary rule that was struck down by a federal court. With Reg BI, consumers will be protected AND they will continue to have access to a variety of retirement products and retirement and financial guidance from professionals acting in their best interest.
SEC Chairman Jay Clayton may have said it best. Regulation BI’s requirement and disclosures “are designed to increase investor protection while preserving access for Main Street investors—both in terms of choice and cost—to a variety of investment services and products.”
Carl B. Wilkerson was Vice President and Chief Counsel, Securities at the American Council of Life Insurers until March 2020. He principally addressed financial service institution regulation that had an impact on life insurance companies. Prior to joining ACLI in 1981, he was a staff attorney at the Securities and Exchange Commission.
