State House News Service


In the Face of Mounting Regulations, Online E&O Insurance Provider Calls for U.S. Financial Professionals to Step Up Compliance Efforts


SAN DIEGO, Nov. 15, 2017 /PRNewswire/ -- One can sum up the history of U.S. financial advisor regulations with two phrases: "expanded requirements" and "greater transparency." This has produced mounting pressure for them to be perfect, while forcing them to more widely divulge their errors or omissions, potentially harming their reputations and ability to make a living.  

For these reasons, EOforLess, a provider of online E&O insurance, is calling on financial professionals to tighten their compliance efforts as well as to step up voluntary disclosures that show consumers they have nothing to hide.

It's easy to see why financial professionals feel burdened by new regulations. The U.S. Department of Labor's Fiduciary Rule, for instance, though currently under review, has restricted the range of products agents and advisors can sell and how they're paid. Even if DOL scales back the rule in 2018, they will still face heightened fiduciary liabilities.

Similarly, many state securities regulators have adopted new financial exploitation rules that require licensees to notify authorities if they spot evidence a stranger or relative has victimized a senior client. What's more, new cybersecurity regulations at both the federal and state levels have tightened the screws on financial professionals who have failed to protect their clients' personal data against identity thieves and data hackers.

While adopting these and many other measures in recent years, regulators are also raising the stakes regarding transparency. For instance, FINRA has added more advisor data points to its BrokerCheck database and required advisors to put BrokerCheck links on their websites.

The upshot: financial advisors are under pressure to never make mistakes. But if they do, they can potentially face blowback in terms of damaged reputation and income, not to mention greater risk of E&O insurance claims.

In response, EOforLess and its sponsor, the National Ethics Association, are calling for financial professionals to increase efforts to remain in regulatory compliance. This involves reviewing and tightening practices in these areas:

  • Licensing
  • Advertising/solicitation
  • Suitability
  • Fair Competition/Disclosure
  • Sales Practices
  • Privacy

EOforLess and its affiliated purchasing platform,, are sponsored by the National Ethics Association, a trade group of financial professionals dedicated to helping its members build their businesses on a foundation of ethics, trust, and best practices.


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