NASAA

NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION, INC. 750 First Street N.E., Suite 1140 

Washington, D.C. 20002

202/737‐0900

Fax: 202/783-3571 

www.nasaa.org

President: David Massey (North Carolina)      Secretary: Rick Hancox (New Brunswick)           Directors: Joseph P. Borg (Alabama)

President‐Elect: Jack Herstein (Nebraska)    Treasurer: Fred Joseph (Colorado)     Preston DuFauchard (California)

Past‐President: Denise Voigt Crawford (Texas)    Ombudsman: Matthew Neubert (Arizona)    Patricia Struck (Wisconsin)

Executive Director: Russ Iuculano               Frank Widmann (Florida)

Submitted by Regular Mail and by email to ebsa.e-ORI@dol.gov 

 

January 18, 2011 

Office of Regulations and Interpretations 

Employee Benefits Security Administration 

2010 Investment Advice Proposed Rule 

Room N-5655 

US Department of Labor 

200 Constitution Avenue, N.W. 

Washington, DC 20210 

Re: Proposed Rule 

2010 Investment Advice – Participants and 

Beneficiaries 

29 CFR 2550 

RIN 1210 – AB35 

To Whom It May Concern: 

On behalf of the North American Securities Administrators Association 

(NASAA)1

, I am submitting this comment letter regarding the Department of 

Labor’s proposed rule concerning the parameters of investment advice offered to 

retirement plan participants and IRA beneficiaries pursuant to proposed rule 29 

CFR 2550 RIN 1210 – AB35 (“Proposed Investment Advice Rule”). 

NASAA supports measures that increase investor protection and 

investment disclosure. We believe in giving investors the best advice possible. 

The protection of retirement funds for the American public is of paramount 

importance. We applaud the Department of Labor for furthering the fiduciary 

duty standard to its handling of ERISA protected assets, which are often the only 

form of savings for retirement held by individual investors. 

                                                           

1

 NASAA is the association of all state, provincial, and territorial securities regulators in North 

America. Its membership consists of the securities regulators in the 50 states, the District of 

Columbia, Puerto Rico, the U.S. Virgin Islands, Canada, and Mexico. Their core mission is 

protecting investors from fraud and abuse in the offer and sale of securities. Organized in 1919, 

NASAA is the oldest international organization devoted to investor protection. 
NASAA has long been in favor of applying a fiduciary duty to those 

providing investment advice. Our support for equalizing the rules of engagement 

as they apply to the American investing public has been made crystal clear to 

Wall Street and to Congress during recent months. NASAA has encouraged 

FINRA and the SEC to embrace the fiduciary standard for all types of investors 

who hold securities, invest, and receive advice from investment professionals in 

a broker-dealer context. It appears that the Department of Labor is taking that 

step forward on behalf of investors and improving the securities industry through 

its Proposed Investment Advice Rule. 

In essence, the Proposed Investment Advice Rule will cause broker 

dealers who offer their services to clients’ retirement funds to provide advice 

through a fiduciary duty model. NASAA voices particular support for the fact that 

the rule will aid all investors, retail, accredited and institutional investors. This is 

in contrast with FINRA which provides few protections for investors under current 

broker dealer suitability standards and even less for accredited and institutional 

investors. 

We know that many investors are currently confused by the varying 

standards that exist, a fact confirmed by the Rand Study which told reported that 

most investors believe that their brokers already have a duty to provide them with 

the best advice possible. 

We believe that broker dealers should accept the fiduciary duty for all 

investment advice (for both taxable and non-taxable assets) and follow the lead 

taken by the Department of Labor’s Proposed Investment Advice Rule. A strong 

fiduciary duty applied to all investment advice offered by broker dealers will avoid 

confusion for investors. Your Department confirms our position that equalizing 

the treatment of investment assets across account types and investors is good 

for investor protection and aligned the reality of broker dealer duty with their 

perceptions. 

We suggest that others consider looking at the standards that you are 

establishing through this Proposed Investment Advice Rule for non-retirement 

funds of investors. 

Please do not hesitate to contact the undersigned regarding this matter. 

Sincerely, 

David Massey, 

NASAA President and 

North Carolina Deputy Securities Administrator