Sent: Tuesday, July 07, 2015 5:21 PM

To: EBSA, E-ORI - EBSA

Subject: Public Comment to the DOL proposed fiduciary rule

Dear Department of Labor,

I write to express my concern with the Department of Labor’s proposed fiduciary rule 

(RIN 1210-AB32).

I am a financial services professional and feel the way the proposed rules are written 

will undermine the thousands of licensed Financial Advisors and Insurance Agents 

nationwide from effectively providing their clients with the best information possible 

about their financial future.

I do however support the DOL’s goal in developing a best interest standard, the current 

proposal is unworkable. This proposal will impede the ability of savers to obtain 

lifetime income guarantees and to receive guidance from expert career agents about 

how to avoid outliving their savings. The lifetime income products that companies, like 

New York Life offer, help retirees replicate the private sector pensions that previous 

generations relied upon. No matter how long people may live, companies like NYL pay 

them a guaranteed income each month. That is income that middle class Americans 

can use to put back into the economy and help support them into their twilight year, 

without the need of relying on government assistance. Assistance that should be 

reserved for Americans who have no other avenues for help.

The guidance of professional licensed agents is crucial for savers who are making one 

of the most important financial decisions of their lives. Savers and retirees need more 

guidance, not less. Under this rule, to provide advice in the “best interest,” the adviser 

must provide advice that: “Reflects the care, skill, prudence, and diligence under the 

circumstances then prevailing that a prudent person would exercise based on the 

investment objectives, risk tolerance, financial circumstances, and needs of the 

retirement investor, without regard to the financial or other interest of the adviser, 

financial institution, any affiliate or other party.”

PROBLEMS WITH PROPOSAL

The proposed rule would restrict access to such guidance and guarantees in several 

ways:

1. Could Effectively Prohibit Access to Top Quality Proprietary Products like Lifetime 

Income: The rule limits retirees’ access to guidance and proprietary products, including 

New York Life’s lifetime income guarantees. In contrast to the implications of DOL’s 

proposal, the sale of New York Life products by a New York Life agent is not a “conflict 

of interest.” Their agents have been trained to understand and explain their 

products. While the Department of Labor has long recognized the value of guaranteed 

income products and pursued policies to promote their use, this rule would have the 

opposite effect.
2. Limits Access for Low Balance Savers: The proposal will be particularly harmful to 

low balance savers, as the proposal implies that commission-based compensation is 

incompatible with a client’s best interest. However, commissions are the most 

affordable way for low balance savers to pay for investment advice and access certain 

products. For example, commissions are the only compensation structure that is 

compatible with guaranteed lifetime income products, which are designed to spend 

down assets. Over the 10-15 year life of our lifetime income products, an agent’s onetime upfront commission translates to about .25 - .5% annually, which is much more 

affordable than the typical 1% annual fee for managed accounts. If small savers are 

unable to access commission-based advice, they will be forced to move into more 

expensive advisory models or access a roboadvisor and lose access to personalized 

financial advice from a trained professional.

CHANGES ARE NEEDED

Because I support the concept of a best interest standard, I urge the Department of 

Labor to make the following changes to make the proposed rule workable for savers 

and retirees:

1. Explicitly and affirmatively clarify that the sale of proprietary products and receipt of 

differential compensation (e.g. commissions and health benefits) are consistent with the 

Impartial Conduct Standard required under the Best Interest Contract Exemption (BICE) 

and revised PTE 84-24. 

2. Remove language creating an unworkable standard that threatens the sale of 

proprietary products by commissioned professionals. The proposed rule states that to 

qualify for the BICE and the Impartial Conducts Standard included in the revised PTE 

84-24, the adviser must provide advice that is “without regard to the financial or other 

interest of the adviser, financial institution, any affiliate or other party.” Removing this 

language and inserting language consistent with the existing ERISA duties of prudence 

and loyalty under Section 404, with its well-established, judicially sanctioned safe 

harbors, would help fix a key problem that makes the rule unworkable and creates a 

chilling effect on much needed retirement planning assistance and guaranteed income 

products for the middle class. 

3. Provide clear guidance and examples regarding compliant sales practices involving 

proprietary products and differential compensation.

I urge the Department to re-write this unworkable rule to achieve the goal of helping 

American retirees achieve a secure retirement, rather than undermining that goal. As 

written, the rule significantly limits American retirees’ access to expert, individualized 

guidance and to lifetime income guarantees.

Thank you for considering my comments.
Best Regards,

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