Testimony given by Groom principal Tom Roberts at the Department of Labor (“DOL”) fiduciary rule hearing was quoted extensively in the media. Insurance NewsNet featured him in their article, “DOL Officials Push Redefinition of ‘Trust and Confidence’ in Fiduciary Hearing Clash,” Investment News featured him in their article, “DOL Hearing Parses Intersection of ‘Best Interest’ and Annuity Sales,” and PLANSPONSOR featured him in their article, “Adviser, Insurance Industries at Odds During DOL Fiduciary Proposal Hearing.”
Investment News wrote, “It is not a fiduciary standard but it is a best interest sales standard,” said Roberts, who testified on behalf of the National Association for Fixed Annuities. “It’s crystal clear for the prospective client that the insurance producer is selling.”
According to PLANSPONSOR, Roberts explained that “transaction-based producers who sell products for commissions, such as annuities, are required in most states to only make recommendations that are in their clients’ best interest.”
PLASPONSOR further noted that Roberts said that “Insurance agents are licensed by states, and most states have adopted the model legislation from the National Association of Insurance Commissioners.”
Insurance NewsNet reported, “We all know there’s a difference between a fiduciary relationship of trust and confidence and a professional sales interaction,” said Roberts. “A professional sales interaction is one where the transaction-based producer seeks to understand the individual circumstances and seeks to determine whether or not a product that that individual has available for sale meets the customer’s needs.”
“You’re scripting a conversation that bears no relationship with any commercial interaction of any kind. Do they understand they’re dealing with a commission salesperson? Of course, they do. They receive a disclosure of the fact that the person they’re speaking to is compensated only if the product is purchased,” Roberts said, according to Investment News.
To read the Insurance NewsNet article, click here.
To read the Investment News article, click here.
To read the PLANSPONSOR article, click here.