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Americans for Annuity Protection (AAP) is joining Texas Tech University in
Best Interest Initiative
The DOL rule requires that any IRA recommendation be in the consumer's best interest and that the compensation be "reasonable." Both of these standards are new and unique to the broad financial services industry. Unfortunately, this leaves the adjudication of these new standards to the courts with a reliance on legal action to bring guidance and clarity to the marketplace.
AAP Board Member, John Gilliam, Professor at Texas Tech University and Leader of the Best Interest initiative, says the work produced "will bring clarity from uncertainty and move the industry forward expediently without having to rely on or wait for legal precedence through the courts."
Today there is no available research data on consumers' attitudes toward a best interest standard or, more importantly, what consumers' believe are the practices and procedures that are necessary to develop a financial planning strategy that is in their best interest; including what role the consumer plays in the determination of their own best interest.
The study will not only look at legal standards for best interest and reasonable compensation but will also evaluate actuarial standards. How compensation impacts consumer and advisor behavior, what benefits hold the most value to consumers, what benefits hold little value, what expenses do consumers expect and can be justified, what expenses do consumers seem excessive or offer little benefit for the cost - these are all questions whose answers will l help identify what annuity features and costs are most beneficial to consumers and, therefore, serve their best interests.
The Best Interest Initiative will provide essential guidance and clarity and hasten the understanding of the how the financial industry can comply and oversee the marketplace today, not tomorrow.
*To receive benefits described the minimum donation required is $250. Your donation is 85% deductible as a business expense in 2016.