The FACC Campaign is concerned many agents and distributors are not aware of THREE VITAL FACTS:
1. DOL HAS NOT YET ISSUED A DELAY – the Office of Management & Budget approved the proposed delay in near record time but we have heard nothing formally from DOL as of today.
2. ALL AGENTS SELLING IRAs ARE REQUIRED TO ADHERE TO IMPARTIAL CONDUCT STANDARDS – even if we do get a delay, that requirement will still be in force. That means all agents must make recommendations in the best interest of their clients without regard to their own financial interest, receive only reasonable compensation, make no misleading statements and disclose sales commission and any material conflicts of interest.
3. THE FULL RULE AND EXEMPTIONS AS ORIGINALLY POSTED IN THE FEDERAL REGISTER STILL TREAT FIAS LIKE SECURITIES and require a BICE be signed by a Financial Institution in order for agents to be paid commission.
The last issue is critical to our industry and consumers. Should the rule and exemptions ever move forward, we must get DOL to remove FIAs from the Best Interest Contract Exemption (BICE) and put into PTE 84-24 consistent with treatment of other fixed annuities.
All agents and distributors are urged to engage in grassroots efforts like the FACC Campaign asking their elected officials to press Secretary Alexander Acosta and newly nominated Assistant Secretary Preston Rutledge to move FIAs back under the PTE 84-24 or a similar exemption crafted for all fixed annuities.
FIAs are sold mostly through independent insurance agents who recommend FIAs primarily for guarantees of lifetime income and market loss protections. However, the Rule and BICE are built around the securities brokerage system and do not work for independent insurance agents.
If the Rule moves forward as written, FIAs will be put at a severe disadvantage in the IRA marketplace, and that will ultimately be harmful to consumers who rely on these valuable products.
We need leaders in Congress to work with DOL Secretary Acosta and his staff to address this issue. We believe this is imperative so that the Rule and Exemptions are workable and fair for the benefit of all concerned parties including consumers and financial services providers.
Stay informed, get engaged, and TAKE ACTION!