Political advocacy is in our clients’ best interests

Professional insurance and financial advisors work in their clients’ best interests. It’s fundamental to what we do. It’s a key part of the code of ethics I agreed to abide by when I joined NAIFA. It’s also the law.

More than three-quarters of U.S. states, including my home state of Nebraska, have enacted laws or regulations based on the National Association of Insurance Commissioners model for annuity transactions, which is in accord with the Securities and Exchange Commission’s Regulation Best Interest. Both the NAIC model and Reg BI enforce a best-interest standard for financial transactions.

The widespread success of the NAIC model is largely due to the advocacy efforts of NAIFA and our friends at the American Council of Life Insurers. Grassroots efforts by agents and advisors have influenced policymakers from Alaska to Florida and from Michigan to Texas to adopt the model.

This is obviously good for our clients, but it also benefits us as advisors.

The benefits of best interest

There are two big reasons we have advocated in favor of these measures. First, it’s the right thing to do. Consumers need to know that the agents and advisors they work with have their interests at heart and are committed to their financial success. Bolstering consumer protections enhances the reputation of our industry.

Public policy such as the NAIC model and Reg BI — what NAIFA past President Robert Miller has often referred to as “smart regulation” — helps crystalize the professionalism of agents and advisors in the minds of consumers, while keeping potential bad apples at bay. Strong regulations supported by our industry help build trust.

Second, interstate models and well-conceived federal actions ensure that the rules are consistent nationwide. They prevent a mishmash of confusing and potentially contradictory regulations. They discourage states and the federal government from proposing more draconian measures, and they provide groups like NAIFA with a foothold in their efforts to oppose unworkable proposals.

NAIFA has a strong working relationship with the NAIC, and the input of the agent-advisor community helped shape the annuity transactions model. We also worked with the SEC during the drafting and revision of Reg BI. The influence of agents and advisors helped remove some proposals that would have prevented financial professionals from working with many Main Street Americans. In the end, these smart regulations enhance consumer protections while allowing us to stay in business and retain a variety of business models that work well for our clients.

Advocacy is part of being a professional

I am proud of the advocacy work I have done over the course of my career on behalf of my business, clients and community. I know it makes a real difference. I know that advocating for laws and regulations that promote financial security and benefit consumers is another way I work in my clients’ best interests.

No one understands better than agents and advisors how laws and regulations can either improve or hinder our ability to serve our clients. Even well-meaning politicians — who are not elbow-deep in Main Street Americans’ finances and fully invested in their success on a daily basis — can’t be sure what unintended consequences their actions might cause. They can’t know unless we tell them.

That is why I support smart policies and why I stay politically involved.

Mike Struebing, LUTCF, CLU, LACP, RICP, CLTC, from Omaha, Neb., is the vice chair of NAIFA’s National Grassroots Committee. He may be contacted at [email protected].