The False Claims by Brokerage and Insurance Lobbyists

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The brokerage and insurance industry are lobbying to prevent states, like Maryland, from adopting a fiduciary standard. Those efforts, however, have exposed a series of false claims that belie the immense benefits a fiduciary standard brings to consumers.

The scene of Wall Street’s securities and insurance lobbyists descending on Annapolis March 13 to beat back the fiduciary proposal was out of Hollywood. The occasion was a legislative hearing to decide the fate of the Financial Consumer Protection Act of 2019 (Senate Bill 786 and House Bill 1127), which would impose a fiduciary duty on all financial professionals in the state.

Some 20 “suits” used their allotted three minutes each to describe the horrors the fiduciary standard will impose on investors. Among others, it will “drive up compliance costs,” “restrict choice to consumers” and impose “added costs and risks.”

I alone spoke for the legislation to the Maryland House Economic Matters Committee, while other fiduciary advocates submitted written testimony.

I implored delegates to do two things. First, to meet “Gail from Maryland.” On the home page of the Institute’s website, we feature Gail in a short video. Gail lives near Annapolis. She is accomplished, educated and smart.

Gail is also scarred from abusive conduct of a broker (who, of course, is not a fiduciary). I commended her to the delegates. Gail found the courage to publically speak out. I asked delegates to watch the video, listen to Gail and keep her picture and story in mind as they proceed to decide on a fiduciary rule.