The North American Securities Administrators Association (NASAA), a body that in part represents state securities regulators in the United States, is proposing revisions to its model rule on “Dishonest or Unethical Business Practices of Broker-Dealers and Agents.” State regulatory agencies often adopt finalized model rules.
In part, NASAA’s stated purpose of the revision is to strengthen existing regulations so as to ensure that financial services agents act in the best interest of their clients. But in reality, NASAA is attempting to advance state level rules that are largely similar to the U.S. Department of Labor’s (DOL) 2016 Fiduciary Rule, which also made similar claims of good intentions.
HLF previously commissioned an in-depth analysis of DOL’s 2016 fiduciary rule, focused on both the damage caused by the rule before it was struck down by a federal court, and the financial harm that would result if the Department moved to reinstate the rule. (Side note: the Department of Labor has indeed announced plans for reinstatement of the fiduciary rule.)
Among the conclusions of the HLF study are that those with retirement savings below $100,000 suffered the most harm, and reinstatement of the rule would increase the wealth gap for Hispanic and Black Americans by a jaw-dropping 20%.
In response to NASAA’s proposed changes, HLF submitted a comment letter.
