When The Barriers Come Down, Will Insurers Take The High Road?

Agents and advisors who were worried about the Department of Labor’s fiduciary rule have reason to feel some relief from the election of Donald Trump.

But the election should also be a warning against going back to business as usual.

Many of Trump’s votes were cast against Hillary Clinton, but he also drew a large segment who hadn’t voted before or had cast ballots for Barack Obama and didn’t see the change they wanted.

These were the people that career politicians didn’t even see. These were the people who propelled Trump past the Republican Party’s plan of pitting Jeb Bush and Marco Rubio in a mentor/mentee face-off to determine the next presidential candidate.

These were the people who didn’t care who “won” the Trump-Clinton debates on points and style. They had no stomach for that. The time for quiet, civil debate was over for these folks.

If they were working, it was probably a few jobs. When they looked at the immigration issue, they didn’t see children being separated from parents in mass deportations. They saw their own kids who could not get out of their dying towns and could not compete with the under-the-table economy of migrant labor.

These are also the same people who did not vote for Wall Street to run the show. And they want some real answers about their retirement security.

I never thought the DOL conflict of interest rule was going to do what it intended. Basically, it would chase out small sellers and reward larger, more efficient shops that could protect themselves against litigation.

But that did not mean consumers’ best interest would be served. As advisors would move out of commission-based sales and into fee-based advising, they would be leaving quite a few clients behind.

How many average American families with a couple of children have the extra money for advisor fees? Also, how many people with a modest sum to retire on will know what to do with that money? The Obama administration’s answer had been let them robo, but is that necessarily serving them well?

Anyway, both sides of this issue have at heart good reasons for what they believe. It is not the good vs. evil that some have described.

At the center of all this is a populace seeing a bleak future and voting for someone who promised vengeance against those responsible for these conditions.

People can, and are, arguing whether Trump is the person who can actually do that. But that should not matter to our industry.

Insurance and financial companies have long said if the barriers could be lifted, they would serve the public better. Well, the public sure could use somebody doing that.

So, insurers and financiers, here’s your chance. With the possible demise of the fiduciary rule and the Dodd-Frank reforms, it looks like it will be an open road ahead.

Where are you going to take us?

Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers, magazines and insurance periodicals. He was also vice president of communications for an insurance agents’ association. Steve can be reached at smorelli@insurancenewsnet.com.

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