ADISA to Testify Before Department of Labor Regarding Proposed Fiduciary Rule

Indianapolis, Indiana, UNITED STATES

INDIANAPOLIS, Aug. 3, 2015 (GLOBE NEWSWIRE) -- The Alternative & Direct Investment Securities Association (ADISA) announced today that it will testify before the Department of Labor on August 13. The testimony will regard the DOL's proposed regulation defining who is a "fiduciary" by reason of providing investment advice for a fee, or other compensation, to retirement savers and retirement account. The proposed regulation also includes a "best interest contract exemption."

The DOL's Best Interest Contract Exemption would "provide conditional relief for common compensation, such as commissions and revenue sharing, that an adviser and the adviser's employing firm might receive in connection with investment advice to retail retirement investors."

Testifying on ADISA's behalf will be ADISA's Legislative and Regulatory Committee Chair, John Grady (Chief Strategy and Risk Officer of RCS Capital Corporation.) Grady is also serving as the current vice president of ADISA's Board of Directors. More than 400 professionals requested to testify at the hearing, according to reports from the DOL. Only a fraction of those are chosen to testify.

"ADISA strongly believes that while the intention of the DOL may be well-meaning, the fiduciary rule proposal may have damaging, unintended results that will negatively impact both the investment industry and investors," said ADISA's President Tom Voekler (Kaplan Voekler Cunningham & Frank.)

ADISA's Executive Director and CEO John Harrison noted that, "As a result of the proposed rule's limits on financial advisors with regard to how they can charge clients, the new definition would have great potential to unintentionally lock out individual investors, especially from younger demographic groups and smaller net worth individuals. Also, the availability of products and programs to such investors would be limited because needed advice and access to these products would be harder to get. As we stated in our comment letter to the DOL last month, the proposal suffers from fundamental flaws, and as a result, should be withdrawn."

On July 21, ADISA's board of directors submitted comments to the DOL regarding the proposal. Following is a summary of the comments:

  • The Proposal unfairly and improperly targets financial advisers who receive variable compensation, and would eliminate the ability of financial advisers and their clients to choose the service model most appropriate to their needs, especially the needs of younger and/or lower net worth individuals.
  • The Proposal represents a piece-meal approach to regulating financial advisers, which will only create confusion and differential treatment of savers and investors generally. 
  • The BIC Exemption would limit the types of products and programs available to retirement accounts and their owners, and potentially negatively impact their ability to meet their savings and retirement goals.

The letter can be read in its entirety here.


The Alternative & Direct Investment Securities Association is the largest trade association serving alternative investment and securities industry professionals who are active in offering, managing and distributing private and public direct investments. ADISA connects members directly to key industry experts through intimate forums and leading edge conferences and trade shows providing timely trends and education. The association was founded in 2003 and has more than 4,000 members who are key decision makers that represent over 30,000 professionals throughout the nation. ADISA works to maintain the integrity and reputation of the industry by promoting the highest ethical standards and providing education, networking opportunities and resources to its members.


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