The PRO Act: Health Benefits and Independent FAs

Employee-Level Benefits for Independent Financial Advisors Already Exist

Last month we talked about the latest Supreme Court case that all but guaranteed the Affordable Care Act – and astronomically high healthcare prices – are here to stay for independent financial advisors. 

Today, we see a direct correlation to the PRO Act, a piece of legislation in Congress that would fundamentally upend the industry and re-categorize most independent advisors as employees of the broker-dealer they affiliate with.

For years we, the Financial Services Institute (FSI), have successfully dealt with states’ attempts to protect workers in some industries that government officials believe should be employees and not independent contractors. 

Their motives are honorable: They believe the benefits afforded to certain workers should be given and would be if only they were employees. 

We talk to them and explain to them our members are independent contractors for a reason – and the last thing they want to be is an employee. And it works. 

What Can Independent Advisors Do for Benefits?

But now, the PRO Act, which would impose a stringent worker classification test that would almost certainly re-categorize many independent advisors as broker-dealer employees under the National Labor Relations Act, is under consideration in the U.S. Senate.

Defending the industry against the PRO Act

Everyone reading this piece knows what it would mean if this bill became law. And FSI is doing everything possible to prevent that from happening. 

Just like we did in the states, we will continue our constructive engagement, and are confident we will prevail in ensuring independent advisors are carved out of anything that becomes law as their inclusion is not warranted or even wanted by the people the legislation intends to protect. 

That being said, the PRO Act brings up a good point. While they don’t want to be employees of a broker-dealer, what do independent advisors do for benefits, when they leave a wirehouse, regional firm or any other employee model firm? 

Surging Costs of Healthcare: An Obstacle to Going Independent

When an advisor is an employee, he or she typically gets healthcare, long-term disability and term life either fully paid for them, or heavily subsidized. Then, the independent recruiter calls, and they love the idea of going independent and owning their own business for the first time. 

Once that initial glow wears off, they start to do the math, and they could be facing hundreds (if they’re lucky) or thousands (most likely) of dollars per month out of pocket for insurance. 

Healthcare costs – A major obstacle to going independent

That’s why our CoveredAdvisor program is so critical for independent advisors, their staff and the recruiters trying to get them to go independent. Our program now is the complete bridge that’s been so badly needed for decades. The plan offers: 

  • Group & Individual Long-Term Disability: We now protect up to 75% of advisors’ incomes by providing up to $35,000 in monthly benefits.
  • Group Term Life/AD&D: Maximum benefit of $750,000 and $250,000 for spouses. Benefit automatically doubles for an accidental death to $1.5 million. 
  • Staff of Advisors: Bundled benefit of short- and long-term disability plus term life/AD&D.
  • Critical Illness and Accident Insurance.
  • Succession Planning and Overhead Insurance.
  • ACA-compliant major medical insurance for individual financial advisors and their families in ALL 50 states with monthly premium savings up to 50% off the open market. 

So while the PRO Act, if it ever became law, would have dire consequences for independent financial advisors, FSI is always fighting to protect advisors’ independent contractor status. 

And our CoveredAdvisor Benefits Program is here to help them save dramatically off the open market. 

Chris Paulitz, Head of Strategic Initiatives, FSI

Chris Paulitz is Head of Strategic Initiatives at the Financial Services Institute, where he oversees CoveredAdvisor.

To learn more on CoveredAdvisor visit and use the Special Access Code FSI4ME. 

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