The Missouri Chamber of Commerce and Industry is opposing a potential regulatory burden that would be placed on the state’s financial institutions.
The Senate Insurance and Banking Committee recently heard testimony on House Bill 863 which requires clients to sign a written consent form when financial advice is given. According to Missouri Chamber Director of Legislative Affairs Phillip Arnzen, this would be a new mandate for financial firms to follow.
“This would put Missouri in a different playing field than any other state. Most financial and securities law is done on the federal level. That way, there is uniformity across the country,” Arnzen said.
The bill also has a provision calling for a financial advisor to not consider environmental, social or governance (ESG) characteristics in a manner that overrides their fiduciary duties.
“The definitions of ESG in here are vague and open for interpretation. It just says incorporating a social or environmental criteria,” Arnzen said. “My definition of social or environmental might be different than yours. A good example would be if a factory decides to switch their lights from incandescent to LED lights, and they promote that saying they’ll save x amount of dollars as well as help the environment. Is that for the environment or is that for the financial benefit?”
“As a result, many financial firms, which are risk adverse, are going to mandate that these forms are going to be signed by every customer, regardless of what the investment strategy is. So, we believe this legislation would be costly and put a new mandate on any financial firm that does business in Missouri,” Arnzen concluded.
For more information, contact Arnzen at parnzen@mochamber.com or 573-634-3511.
