The Insured Retirement Institute (IRI) weighed in on the New Jersey Bureau of Securities new proposed regulation for fiduciary standard of conduct for financial services professionals.
Jason Berkowitz, IRI chief legal and regulatory affairs officer, said its IRI’s preference that states use the U.S. Securities and Exchange Commission’s (SEC) Regulation Best process, which is currently in the works, as its standard of conduct.
IRI officials said New Jersey’s decision to move ahead without waiting for the SEC to conclude its rulemaking could cause confusion for insurers, broker-dealers and financial advisors. They said it creates the potential for conflicting guidelines in how provide financial advice to clients.
If the new rule results in fewer advisors and higher compliance cost, it could impact consumers, according to IRI. They add that it may make advisors less likely to take clients with moderate investment funds, less product innovation and reduced availability of lifetime income products.
IRI said it will review the proposal and file comments with the New Jersey Bureau of Securities.
“IRI will continue to work with New Jersey regulators to minimize the potentially substantial unintended consequences of its decision to advance this regulation. A growing patchwork of differing state fiduciary regulations unfortunately may reduce access to qualified financial advice or many Americans, particularly those of moderate income who may most need expert advice to shape an effective retirement savings plan,” Berkowitz said.
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