DOL’s proposed Conflict of Interest Rule threatens retirement security options for most Americans

AXA Equitable submits comments and recommended changes to U.S. Department of Labor

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Discretion Winter
(212) 314-2968

July 27, 2015

NEW YORK — AXA Equitable* – one of the largest life insurance and retirement savings companies in the United States, with nearly 2.45 million client households nationwide – announced today that it formally expressed its concerns about the Department of Labor’s (DOL) Conflict of Interest Proposed Rule (Proposed Rule) due to the harm that the rule would have on retirement savers. The full version of the letter can be found here.

“Unfortunately, the Proposed Rule will result in fewer options, less choice, and diminished financial gain for the majority of Americans trying to save for retirement,” said Nick Lane, Senior Executive Director and Head of U.S. Life and Retirement. “There are significant unintended but adverse consequences for consumers if this rule, as written, is approved.  We know that a similar initiative on the investment industry in the United Kingdom presents a cautionary tale. AXA shares the DOL’s commitment to protecting individual retirement savers and small business plan sponsors, and has recommended changes to the rule to better align it with that commitment.  We look forward to continuing to engage in and contribute to the public conversation on this issue given its importance to all retirement savers and their families.”

AXA’s key concern is that first-time, younger, and modest-means savers will be most affected by the Proposed Rule, due to its blanket approach to the client-advisor relationship as well as the fact that it conflicts with certain existing laws governing the retirement services marketplace, while unnecessarily changing others.  In order to avoid that outcome, AXA’s letter includes the following recommended changes to the Proposed Rule:

  • Restoring both a meaningful Seller’s Exception, which facilitates the provision of transactional advice that is fundamental to many first-time, younger, and modest means savers, as well as a current regulatory exemption that is critical to the sale of annuities, which are one of the only retirements products available that provide guaranteed lifetime income;
  • Harmonizing the Department of Labor’s fiduciary standard with the SEC’s fiduciary standard to avoid conflicting laws which could confuse both consumers and advisors;
  • Revising the Proposed Rule’s Best Interest Contract Exemption (“BICE”) to make it less complex and more consumer-friendly; and
  • Expanding the Proposed Rule’s investment education carve-out to allow reference to specific investment products as illustrative of investment type or asset class.

U.K. presents cautionary tale

The United Kingdom’s recent implementation of the Retail Distribution Review and the subsequent impact on the financial advisor market and its customers is indicative of the unintended consequences that the Proposed Rule would likely have on many Americans. A study by Cass Business School found that the number of U.K. financial advisers fell by 25% during the first year following adoption of the new rules, and the remaining advisers reported that servicing accounts with less than £150,000 in assets was not profitable.

*About AXA

“AXA” is the brand name of AXA Equitable Financial Services, LLC and its family of companies, including AXA Equitable Life Insurance Company (NY, NY), MONY Life Insurance Company of America (AZ stock company, administrative office: Jersey City, NJ), AXA Advisors, LLC, and AXA Distributors, LLC. In business since 1859, AXA Equitable Life Insurance Company is a leading financial protection company and one of the nation’s premier providers of life insurance, annuity, and financial products and services distributed to individuals and business owners through its retail distribution channel, AXA Advisors, LLC (member FINRA, SIPC) and to the financial services market through its wholesale distribution channel, AXA Distributors, LLC.AXA S.A. is a Paris-headquartered holding company for a group of international insurance and financial services companies, including AXA Equitable Financial Services, LLC companies. AXA S.A. is a worldwide leader in financial protection strategies and wealth management with 103 million clients in 59 countries as of December 31, 2014. Find AXA on Facebook, Twitter and LinkedIn. For more information, visit

All guarantees provided by annuities are based on the claims-paying ability of the issuing life insurance company

GE-106065 (07/2015)

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