“Actually, if ithe Iowa standard is based on the NAIC model, it is best interest in name only," she said. "You meet your “best interest” obligation by recommending products that meet the customer’s needs i.e., suitability. Investors will be deceived.”
Ommen, however, said that the NAIC worked hard to preserve consumer choice “so that many more middle-class Iowans will retain access to retirement education and security that they choose.”
The insurance and securities industries have both argued successfully for years that in contrast to commission-based sales people, fee-only fiduciary registered investment advisors work only with the wealthy they can charge a worthwhile asset-under-management fee. Forcing all financial professionals to become fee-only fiduciaries would leave the middle class without access to financial products or advice, the industry groups argue.
“Our experience in Iowa has proven that varied advisory models offer incredibly valuable consumer access to retirement education and security,” Ommen said. “Iowans choose professional financial services either through fee arrangements or through transactional commission arrangements based on their particular needs. Requiring high-quality financial advice that fits the particular needs, objectives and situation of the individual Iowan has always been our primary purpose.”