Advisor Today - July/August 2015 - (Page 48)

FEATURE | Upholding the Tradition As NAIFA celebrates its 125th anniversary, the association is continuing to fight for a favorable business climate for you and your clients. As part of this mandate, it is vigorously pursuing a level playing field for your clients-especially those trying to save and plan for retirement. By The NAIFA Government Relations Team Johnny Johns is in many ways a typical NAIFA member. At his practice in Hazlehurst, Miss., he has worked with some clients for decades to help them prepare for retirement and secure their families' financial futures. But as Chair of NAIFA's subcommittee on political action, Johns understands better than most that decisions made in Washington can dramatically affect the lives of his clients in Mississippi. "I have been working with a couple that I have had insurance with for over 30 years," Johns says. "Thanks to good planning, the husband retired last fall with a well-funded 401(k), and I am in the process of moving that money for him." But now, newly proposed Department of Labor (DOL) regulations could make it more difficult and expensive for Johns to assist clients preparing for and transitioning into retirement. "I recently mentioned to this couple that there was a regulation about to be released that would prevent me from handling their 401(k) transfer and might still prevent me from talking to them about their retirement plan 48 ADVISOR TODAY | July/August 2015 in the future," Johns says. "Needless to say they were not happy about that and asked, 'What can we do?' "I gave them the phone number of every member of the Mississippi congressional delegation.  I explained that it was not a law passed by Congress but a regulation from the Department of Labor, but our representatives and senators could still have some influence on the outcome. They left my office committed to making calls and having friends call as well." The DOL proposal The concerns of Johnny Johns and his clients are not misplaced. Early this year, President Obama indicated that imposing additional regulations on retirement plan advisors would be a priority over the final two years of his administration. He said that some financial professionals are "selling snake oil" and bilking their retirement clients out of billions of dollars per year. His remarks painted advisors with a broad brush and had the potential to tarnish the reputations of honest advisors. NAIFA President Juli McNeely, CFP, CLU, LUTCF, replied quickly and emphatically, defending NAIFA members in numerous media interviews and in an op-ed article in InvestmentNews. "My firm is based in Spencer, Wis., a far cry from Wall Street," she wrote. "I have worked with clients for years whom I may no longer be able to help achieve their retirement goals if the government forces me to switch to a model that doesn't suit their needs or interests. It's a shame, because based on the relationships we've developed, I understand my clients' interests as well as anyone." Nonetheless, DOL proposed its rule to redefine an "investment advice fiduciary" as any advisor receiving compensation for individualized, specifically directed advice to the sponsor of a qualified plan, a plan participant or an individual retirement account (IRA) owner. Under this definition, many more NAIFA members in the retirement space would become fiduciaries. Existing rules prohibit fiduciaries from receiving compensation such as commissions, revenue sharing fees or 12b-1 fees. The DOL issued a new exemption called the Best

Table of Contents for the Digital Edition of Advisor Today - July/August 2015

From The Editor
New Products
How Do You Create the Million-Dollar-Plus Practice?
Traits of Top Performers
The Business Benefits of a Pipeline Mentality
What Does It Mean to Act Ethically?
Variable Universal Life is Back
Sell More LTCI By Selling Less!
Overcoming the Most Common DI Objections
Divorce DI
Mitigating Retirement Risks with Life Insurance
Creating Irreplaceable Capital
Closing the Gap
Financial Future Less than Rosy for Boomers and GenX
Estate Planning and Annuities?
Ignite Your Sales Potential
A Closer Look at BTID
Upholding the Tradition
NAIFA’s Candidates for Election
Addicted to Rejection
What is Keeping Your Senior Clients Up At Night?
Advertiser Index
Back Page

Advisor Today - July/August 2015