Bill to Kill DOL Fiduciary Rule Advances in House
On Wednesday, the House Committee on Education and the Workforce will mark up the Affordable Retirement Advice for Savers Act (H.R. 2823), a bill introduced last month by Rep. Phil Roe (R-TN) and Rep. Peter Roskam (R-IL) to repeal the DOL’s fiduciary rule and establish a statutory definition of “investment advice.”
“For years, this committee has led the fight against the reckless fiduciary rule promulgated by the Obama administration and has promoted commonsense solutions to strengthen protections for retirement savers,” said Chairwoman Virginia Foxx (R-NC). “This legislation represents the next step in our effort to ensure all Americans have access to affordable retirement advice that’s in their best interests.”
Republican lawmakers and opponents of the fiduciary rule maintain that the costs associated with complying with the rule will prevent low- and middle-income retirement savers from accessing affordable advice, while Democrats and rule supporters deem the legislation necessary to protect retirement savers from potential conflicts of interest stemming from the sale of commission-based investments.
The Affordable Retirement Advice for Savers Act establishes a statutory definition of “investment advice” and “requires financial professionals who advise IRAs to act in the best interests of their clients.” Under the bill, advisors would have two years to comply with the new requirements.
The Consumer Federation of America, an association of non-profit consumer organizations, said the bill would leave retirement savers with fewer protections than before the fiduciary rule was finalized.
“H.R. 2823 would strip away protections from working families and retirees just as the DOL fiduciary rule is beginning to deliver the best interest advice they expect and deserve…,” said the CFA in a statement. “Since brokers and insurance agents are now required to provide fiduciary advice and not just self-interested sales recommendations dressed up as advice, retirement savers’ access to genuine advice has been dramatically expanded as a result of the rule.”
Last week, lawmakers discussed a legislative proposal introduced by Rep. Ann Wagner (R-MO) that would repeal the fiduciary rule and create best interest standards of conduct for brokers. Rep. Wagner’s bill also seeks to impose enhanced disclosure obligations on broker-dealers and gives the SEC rulemaking authority on the content of the disclosures.