CHICAGO – Financial & Insurance Conference Planners (FICP) and Society for Incentive Travel Excellence (SITE) issued the following joint statement on the anticipated issuance by the United States Department of Labor (DOL) Fiduciary Rule concerning the Definition of the Term “Fiduciary;” Conflict of Interest Rule — Retirement Investment Advice (the “Proposed Regulation”); and the related proposed Best Interest Contract Exemption (the “BIC Exemption”).
FICP and SITE agree with and support the DOL’s efforts to protect consumer access to retirement investment advice and ensure that financial advisors will continue to act in their client’s best interest. However, as a result of the DOL’s rule, financial services firms will likely be forced to eliminate certain incentives or significantly change compensation structures. These changes could reduce opportunities to motivate and reward top-performing employees, foster business growth, and support the economy.
Businesses such as financial services firms depend on incentive programs. According to a 2014 study by the Incentive Federation, 74% of U.S. businesses use non-cash rewards to recognize and reward key audiences in the form of incentive travel, merchandise, or gift cards; and 46% of businesses running non-cash programs include incentive travel as an award, spending $22.5 billion per year.
Research has also shown that companies with employee recognition programs experience reduced turnover and employee frustration levels, and were more likely to have strong business outcomes (Bersin by Deloitte, The State of Employee Recognition, 2012, SHRM/Globoforce Employee Recognition Survey, 2012).
Any reduction in incentive travel opportunities may also reduce the number of face-to-face meetings where financial services employees can receive in-person education to develop advanced skills, learn about new regulations, and develop professionally. Furthermore, a study by Oxford Economics revealed that every dollar invested in business travel results in $12.50 in added revenues and $3.80 in new profits. These meetings stimulate local economies by bringing in new visitors and new revenue. A decrease in meetings as a result of this new rule will negatively impact communities that traditionally host these meetings.
FICP and SITE are working with Meetings Mean Business (MMB), a meetings industry coalition, to raise awareness of this issue and monitor the rule’s impact. As we learn more about the impact of these rule changes on business events, we will collaborate with MMB and the DOL to try to mitigate any adverse impacts for our members. We are also encouraging our members, hospitality partners and sponsors to educate themselves about this rule and work with their companies’ senior leaders to develop new opportunities for employee recognition that comply with the DOL rule.
Steve Bova, CAE
Kevin M. Hinton, CIS
Chief Excellence Officer
About Financial & Insurance Conference Planners (FICP)
FICP serves to strengthen our members through education, outreach and partnerships so that the positive impact and value of their work is fully recognized by both their organizations as well as the meetings and events industry. For more information, please visit ficpnet.com.
About Society for Incentive Travel Excellence (SITE)
SITE is the only global organization dedicated to strengthening and supporting the incentive travel industry. We connect incentive travel to business results. For our members we provide professional development, certification and business connections. SITE members help companies maximize workforce output by creating and delivering incentive travel programs that inspire people to exceed expectations and transcend their goals. Our research proves the ROI for incentive travel, which is a powerful business tool that strengthens employee retention, improves performance and fosters a culture of thoughtful motivation and sustained success. For more information, please visit SITEglobal.com.