Political Advocacy: Equally Important Locally As It Is In DC

Every insurance and financial services professional must be politically engaged and active. We should recognize it as part of our job description. We work with individuals, families and businesses in every community across the U.S., and we understand, better than anyone else, the financial needs and problems faced by our clients and how laws and regulations affect them.

If we are truly working in our clients’ best interests, we need to share this knowledge with our elected officials and other policymakers so they can make better-informed decisions. Political advocacy is not just a way to promote our businesses; it is crucial for protecting our clients and ensuring that all Americans have access to needed financial products, services and advice.

Misguided public policy can derail a financial plan as surely as a lack of proper guidance.

Every advisor knows that state laws and regulations have huge impacts on their businesses and their success in serving clients. To make a real difference, effective politically involved insurance and financial professionals must be as in tune with what’s going on at the statehouse as they are with policies coming out of Washington.

In my home state of New Jersey, for example, the New Jersey Bureau of Securities announced that it would not move forward earlier this year with a proposal that would have placed a uniform fiduciary duty on securities broker-dealers and investment advisors. This decision provides consumers in my state greater access to financial professionals and more choices when it comes to how they want to be served and how they want to pay for those services. It ensures that options remain available for New Jersey residents who might not have $250,000 or $500,000 or more in assets that fee-based advisors often require, or for many who are simply better served by the existing broker-dealer relationship.

The bureau’s decision also helps to avoid a confusing and potentially contradictory patchwork of rules and laws by the different states and the federal government.
But this result wasn’t created in a vacuum. NAIFA and NAIFA’s New Jersey chapter, along with the support of our industry partners, wrote and lobbied policymakers that the proposed regulation would have unintended consequences for the clients we serve.

Testifying On The State Level

I testified on behalf of NAIFA-New Jersey at a public hearing before the bureau that the U.S. Securities and Exchange Commission’s Regulation Best Interest enhances consumer protections without disrupting relationships between financial professionals and their clients. It also makes rules like the New Jersey proposal unnecessary.

“We have always supported reasonable efforts to protect our clients from unethical behavior and predatory financial practices,” I testified. “A few years ago, it was NAIFA-New Jersey’s efforts that supported the new law, one that granted the New Jersey Department of Banking and Insurance additional authority to discipline insurance or financial advisors.”

But I made it clear that the current proposal would not have the intended effect for many New Jersey consumers. The bureau acknowledged these arguments by NAIFA and our industry partners in its press release announcing that the proposed rule will not be adopted. Our industry and the consumers we serve are better off because of it.

The political advocacy role of insurance and financial professionals — especially at the state level — shows why active membership in associations like NAIFA-New Jersey and NAIFA’s other state chapters is so important. Our associations help us speak with clarity and authority as a single voice. A strong and growing association membership helps amplify our advocacy message and protect the best interests of the consumers we serve.

Our work in New Jersey is just one illustration of how political advocacy by insurance and financial professionals can make a real difference on behalf of our industry, our clients, and consumers. Insurance and financial professionals are serving their clients’ interests by working with policymakers in state capitals nationwide, from Sacramento to Albany, from Austin to Boise, and everywhere in between. I truly believe it’s a vital part of our calling as professionals and servant leaders.

Dennis Cuccinelli, LACP, of Paramus, N.J., is a member of the NAIFA National Board of Trustees. He is also a past president of NAIFA-New Jersey. He may be contacted at [email protected].