Financial security for all, not some

By Marc Cadin

We have a $12 trillion protection gap, and there are tens of millions of Americans who have little to no retirement savings. Finseca is about delivering financial security to all, but achieving that is only possible if we all work together toward that goal. We need policymakers and regulators to come alongside financial security professionals so their work can reach more people, not fewer. But we have serious concerns about the rise of the regulatory state and the impact it will have on an already challenging compliance burden.

For example, if the Securities and Exchange Commission wins its ongoing legal challenge in SEC v. Cutter, more compliance and greater regulatory burdens may be coming your way. Finseca formally opposes the SEC’s actions, and you can read our legal brief at finseca.org.

Similarly, we’re very troubled by the news that the Department of Labor has submitted the final version of its independent contractor rule, which could deprive advisors of the right to do business as independent contractors, as well as their efforts to resurrect a new fiduciary rule.

We took enormous strides forward earlier this year when we got SECURE 2.0 signed into law with overwhelming bipartisan support. But if the SEC and/or the DOL successfully move these misguided efforts forward, they would unquestionably harm consumers and monumentally set back our movement. These initiatives, put simply, would enhance the regulatory burden on the very men and women working to help people find peace of mind. Fewer Americans will have access to the advice and products needed to achieve financial security.

Finseca believes in appropriate levels of regulation to ensure consumers are protected. Still, excessive compliance and regulatory burdens lead to fewer Americans being financially secure.

President Joe Biden knows the struggle so many are facing. Last July, he reminded us, “People around the country wake up every day wondering whether they’ve saved enough to provide for themselves and their families before they stop working.” He asked us, “Think of all the people saying, ‘Am I going to be all right? Is my family going to be all right? Is my wife or my husband or my child, are they going to be OK?’”

Financial security professionals put an end to those worries. And as a recent Ernst & Young study shows, life insurance — especially permanent policies, investments and deferred income annuities — outperforms investment-only or investment-plus-other-products approaches in every combination. Individuals and families with life insurance, investments and guaranteed streams of lifetime income through things such as annuities are in a significantly better position to absorb the challenges that life throws their way.

We need to encourage more Americans to pursue holistic financial plans. We need to connect more Americans with financial security professionals. We need to exponentially grow the financial security profession and make their jobs easier, not harder. We must remember that our work will only be done when every American can put their head comfortably on their pillow at night, knowing they have a plan in place and they will be OK.

Finally, although this Department of Labor fiduciary rule effort is likely well intentioned, it is a solution in search of a problem that has already been addressed. Since the DOL’s last attempt to do this, there are now 40 states (representing more than 70% of U.S. consumers) that have adopted the best interest enhancements to the National Association of Insurance Commissioners Suitability in Annuity Transactions Model Regulation and the SEC’s adoption of Reg Best Interest, which greatly enhanced the standards financial professionals must follow.

Financial security for all is only possible by expanding access and choice — not limiting them.