The Financial Services Institute’s (FSI) mission is to ensure that all individuals have access to competent and affordable financial advice, products and services delivered by a growing network of independent financial advisors and independent financial services firms.
Issues Impacting Main Street Americans
Standard of Care
FSI has long supported a workable standard of care for all financial advice. The SEC’s Regulation Best Interest (Reg BI) established such a standard, and we will continue our support of this effective rule. We will also advocate for the implementation of the Department of Labor’s (DOL) Prohibited Transaction Exemption for Investment Advice Fiduciaries. This exemption aligns the Department’s regulations with the requirements of Reg BI. Lastly, we will continue to oppose state efforts to implement fiduciary standards, particularly those that conflict with Reg BI.
FSI supports efforts to provide financial education to Americans of all ages, from grade school to adult.
We are also advocating for regulators to ease the burden of providing non-English paperwork and disclosures to clients. In addition, we will provide resources to members to help advance diversity, equity and inclusion efforts to expand and promote diversity among the independent financial services industry and clients.
Prevention of Financial Exploitation of Seniors
In 2021, we will continue our efforts to prevent the financial exploitation of seniors and vulnerable adults. We will advocate for states to adopt the NASAA model rule protecting seniors from financial exploitation. In addition, we will support efforts by FINRA to provide additional tools and flexibility to firms grappling with suspected financial abuse, such as longer hold periods. We will also create opportunities for dialogue between our members and regulators on this crucial issue.
Issues Impacting Independent Financial Services Firms & Advisors
Retirement & Tax Issues
As states and the federal government look for additional revenue sources, we will vigorously oppose efforts to tax financial services and transactions or impose professional privilege taxes on financial advisors. We will also work to preserve and protect the tax treatment of capital gains and restore the tax-deductibility of advisory fees.
In addition, we will work to implement the DOL’s proposed worker classification rule. It will assist in assuring that financial advisors affiliated with independent broker-dealers are able to maintain their independence by being properly classified as independent contractors.
Lastly, with the looming retirement savings crisis, which has been compounded by the economic impact of the COVID-19 pandemic, we will advocate for comprehensive retirement security legislation from Congress.
Reducing Burdens on Financial Advisors & Firms
FSI supports efforts by regulators that will simplify or streamline requirements and procedures. We are continuing our ongoing effort to seek relief from the SEC, to allow for the payment of securities income directly to an independent advisor’s practice.
Issues Impacting the Financial Services Industry
Regulation by Enforcement
Financial services firms, financial advisors and investors rely on consistent, predictable rules governing the regulatory road. Regulation by enforcement creates uncertainty for firms by not providing proper guidelines on operations, leads to inconsistencies in regulatory interpretation and enforcement, and increases costs for investors.
FSI will continue to oppose regulatory enforcement activity that is predicated on regulator staff guidance. Instead, we encourage regulators to follow the appropriate rulemaking procedures, including a notice and comment period.
A particular concern is the SEC’s share class selection disclosure initiative and subsequent enforcement activity, such as money market accounts and bank sweeps.
Modernization & Leveraging Technology
In 2020, as the COVID-19 pandemic led stay-at-home orders and remote work, we witnessed a swift transition to virtual work environments and the adoption of new technologies across all industries. We encourage regulators to embrace technological advancements that will allow virtual examinations and branch inspections, e-delivery as default, e-signature and wide use of electronic disclosures. These changes will help increase efficiency and enable our members to reach clients where they are.
Due to the evolving virtual work environment, we will seek clarity on the definition of “branch” offices and licensing requirements.
Lastly, we will provide educational opportunities for our members on cybersecurity issues, such as cyber breaches and disruption of service events, to assist them in adequately preparing and reacting to cybersecurity threats.
Advocacy Action Center
Our Advocacy Action Center is designed to help you get involved with simple but effective steps. There you can write a comment letter, identify your representatives in Congress, learn about FSI PAC and more.