NASAA distances itself from state fiduciary efforts, wants Reg BI to succeed

IRI also pushes for SEC rule, and a bill to promote annuities in retirement plans

Mar 5, 2019 @ 4:46 pm

By Mark Schoeff Jr.

State regulators are putting some distance between themselves and state lawmakers pushing for state-level investment advice reform regulations.

Legislative and regulatory efforts are underway in Nevada, New Jersey and Maryland to raise the broker standard of care.

Michael Pieciak, Vermont commissioner of financial regulation, said the organization he leads, the North American Securities Administrators Association, will concentrate on helping make the Securities and Exchange Commission's advice proposal better.

"A lot of stakeholders at the local level want to protect investors, want to protect citizens in their states, and that's their prerogative," Mr. Pieciak said on Capitol Hill on Tuesday. "We have been as an association focused on engaging with the SEC, trying to provide as many comments, as much direction as to how we think it can be improved as possible because we think that's the most valuable use of our time right now."

Mr. Pieciak said a recent NASAA comment letter on the centerpiece of the SEC proposal, the so-called Regulation Best Interest, was not meant to be critical of the SEC's effort.

State regulators instead were encouraging the agency to state explicitly how the measure would force the brokerage industry to change practices that allow harmful, conflicted advice.

"We want to see the SEC succeed; we want to see the rule succeed," Mr. Pieciak said in an interview after the event. "We think they should clarify their guidance and provide examples of how the rule will play out in specific factual scenarios."

He appeared at an event at which NASAA released its legislative agenda for this Congress. In addition to calling for strong congressional oversight of the SEC's rulemaking process on Regulation Best Interest, state regulators also are advocating to protect state securities enforcement authority from federal intrusion, beef up oversight of the sale of unregistered securities as well as regulation of the pool of sophisticated investors who can buy them, and curb mandatory arbitration in brokerage and advisory contracts.

Earlier Tuesday, the Insured Retirement Institute also unveiled its legislative and regulatory agenda, which includes support for Regulation Best Interest as well as an effort by the National Association of Insurance Commissioners to strengthen annuity sales rules.

"We think the approach the SEC has taken, as well as NAIC, are appropriately product-agnostic and [ensure] financial professionals are acting in their client's best interest," said Jason Berkowitz, IRI chief regulatory and legislative affairs officer.

Investor advocates have asserted the SEC and NAIC proposals fall far short of required reforms to protect investors.

The IRI also is urging Congress to pass the Retirement Enhancement and Savings Act, which was recently introduced in the House. Among other provisions, the bill would make it easier for employers to include annuities in company retirement plans and would make annuities portable between jobs.

"We're going to see momentum building to move legislation sometime this year," said Paul Richman, IRI chief government and political affairs officer.

A spokesman for Senate Finance Committee chairman Charles Grassley, R-Ia., said RESA is a priority for Mr. Grassley and that he will "re-introduce legislation as soon as it's ready."


What do you think?

View comments

Recommended for you

Featured video


Female leaders highlighted as future of financial advice

InvestmentNews recognized 20 Women to Watch for their efforts to advance the financial advice industry.

Latest news & opinion

Finra panel dismisses $100 million case involving drop in Merrill Lynch stock

Former brokers bringing charges related to stock losses during financial crisis have had 15 cases proceed, four stopped so far.

Principal-Wells Fargo retirement deal would be among largest ever

Acquisition would be in line with trend of record keepers seeking to gain scale to combat fee reduction.

ESG options scarce in 401(k) plans

There's growing interest among plan participants, but reluctance to add funds that take into account environmental, social and governance factors persists.

Ameriprise getting ready to launch its bank

Firm's advisers will soon have access to lending products such as mortgages.

Envestnet acquires MoneyGuide for $500 million

Deal will allow Envestnet to deepen integrations between MoneyGuide and its other wealth management solutions.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print