As the Financial Services Institute celebrates 15 years of advocating on behalf of independent firms and advisers across the country, we are very pleased that our voice in Washington, D.C., and the states has continued to grow in influence — and pleased with the progress that has been made on the issues that matter for our members.
Looking at the current regulatory and legislative landscape, however, there's far too much to do to spend time reflecting on past accomplishments. Throughout the balance of 2019, the FSI will be concentrating our advocacy efforts on the following top priorities.
Issues of concern to clients
1. Workable best-interest standard of care. The FSI has been a vocal proponent of a workable standard of care that would apply to all advisers, regardless of their business model. This means that we will continue to support the SEC's efforts to finalize its Regulation Best Interest proposal in order to establish a universal standard of care that improves investor protections without raising costs or reducing access to financial advice.
At the same time, we will continue to oppose efforts to create separate fiduciary standards in various states across the country, which would create a confusing patchwork of requirements.
2. Retirement security solutions provided by the private sector. One of our most important missions is to improve the ability of Main Street Americans to save for a secure retirement. Our efforts here will include working to restore the deductibility of advisory fees, as well as supporting state multiple-employer plans and voluntary state-run retirement plans.
3. Prevention of financial exploitation of vulnerable adults. We will continue to advocate for the adoption of the North American Securities Administrators Association model rule protecting seniors from financial exploitation.
Issues of concern to firms and advisers
1. Independent contractor classification. In addition to our ongoing work with the "I'm Independent" coalition in California, we will continue to educate states on the independent broker-dealer model and provide our members with best practices on worker classification challenges.
2. Reducing burdens on business entities operated by financial advisers. Modern advisory business models have evolved, and the SEC's adoption of a "single-factor test" prohibits broker-dealers from paying commissions, or other forms of transaction-based compensation, to an unregistered entity operated by a financial adviser. That test poses an unnecessary challenge to advisers' ability to serve their clients. We will continue to advocate in favor of modernizing these rules.
We will also continue to support association health plans and other measures that can reduce burdens on small businesses.
3. A level playing field for firms and financial advisers (harmonization). We support the harmonization of regulatory requirements for investment advisers and broker-dealers.
Issues of concern to the financial services industry
1. High-risk brokers. It is crucial for our industry to support measures that will comprehensively ban advisers and firms with a demonstrated history of harming investors from having continued access to investors, whether in a securities or insurance capacity.
2. Federal cybersecurity requirements. The FSI supports efforts to create a national data breach notification requirement and to ensure that cybersecurity requirements are not "one-size-fits-all."
Dale Brown is president and CEO of the Financial Services Institute.