SIFMA Statement for the Record
Senate Health, Education, Labor and Pensions (HELP) Committee
Full Committee Hearing – The Right to Organize: Empowering American Workers in a 21st
Thursday, July 22, 2021
The Securities Industry and Financial Markets Association (SIFMA)1 appreciates the opportunity to submit written testimony to the Senate Committee on Health, Education, Labor and Pensions on the hearing, “The Right to Organize: Empowering American Workers in a 21st Century Economy.” We acknowledge the Committee’s interest on this topic and would like to share our views specifically with regards to legislation that would affect how independent contractor status is determined.
Independent contractor status has long been an integral part of the financial services industry. Independent broker-dealers and the nearly 150,000 individuals that affiliate with them as independent financial advisors serve millions of clients across the country. These individuals operate small businesses, providing main street investors in their communities with personalized and comprehensive financial advice. They help their clients to invest, save for retirement, pay for their children’s education, and buy insurance to cover unexpected events. Often, they serve generations of families.
There are many benefits to being an independent financial advisor, and why many choose independent over employee status. They enjoy running their own business, hiring and managing their support teams, and choosing where to operate, allowing them to reach often underserved communities. They have the advantage of creating their client base and understanding their needs and deciding how best to serve them. In the highly regulated industry in which they operate, independent financial advisors affiliate with an independent broker-dealer that handles their licensing and supervision and provides the platform to effectuate and record their clients’ transactions, all in in compliance with federal and state securities regulations designed to protect investors. They maintain leverage by being able to pick and choose the broker-dealer platform that best serves their business and client needs.
1. SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA is the voice of the nation’s securities
industry bringing together the shared interests of hundreds of broker-dealers, investment banks and asset managers. We advocate for effective and resilient capital markets.