First Do No Harm

The great medical axiom “Primum Non Nocere” translated is “first do no harm.” Surprisingly, it’s not in the original Hippocratic oath, but it’s maxim nevertheless. Much like the saying “do unto others as you would want them to do to you.”

So when the Department of Labor introduced the Fiduciary Rule, which states the obvious “to work on the best interest of the client,” I was dumbfounded. First, I just assumed everyone’s practice was client centric. Secondly, I thought the sale of fixed annuities was under the jurisdiction of the Department of Insurance and not the SEC. But apparently, the replacement of mutual funds and ETFs with annuities are under their purview. No, it isn’t but the DOL’s actions was an attempt to do just that.

Thirdly, was the whole Fiduciary rule a reaction to annuity purveyors exchanging qualified mutual funds and ETFs for fixed and/or lifetime annuities because we had no regard for the client’s best interest? Or was it more likely that the Fiduciary Rule unduly targeted non-security licensed insurance professionals to preserve assets under management for their own sales force? Are insurance agents more likely than registered representatives or registered investment advisers to commit a breach of client suitability?

When the Fiduciary Rule was shelved, many in the insurance industry heaved a sigh of relief and declared it dead. But it’s not dead, it’s just in a coma. It only takes a another piece of legislature with a disposition to regulate to revive it.