Bill to Repeal Fiduciary Rule Approved in House Committee
The House Committee on Education and the Workforce approved the Affordable Retirement Advice for Savers Act (H.R. 2823) in a 23 to 17 vote along party lines.
The bill, introduced by Rep. Phil Roe (R-TN), repeals the Department of Labor’s fiduciary rule and establishes a statutory definition of “investment advice” and maintains that retirement advisors serve their clients’ best interests.
“For years, this committee has led the fight against the flawed fiduciary rule on behalf of working families,” said committee chair Rep. Virginia Foxx (R-NC) “We all agree that financial advisors should act in good faith. We can achieve that goal without making it harder for people to build a secure retirement. This legislation proves it.”
Fiduciary rule proponents believe that the regulation is necessary to eliminate conflicted retirement investment advice, while opponents believe it’s excessively costly and burdensome, while leaving financial advisors vulnerable to frivolous lawsuits.
“Without the [fiduciary] rule, unscrupulous advisors would be free to sell products that yield them the biggest profits, but would not necessarily be in the best interest of their retirement clients,” said Rep. Bobby Scott (D-VA). “Most financial advisors have acted appropriately in their retirement clients’ interests, but some have not. They have been able to get away with it because of the loopholes and the decades-old regulation, but not anymore that the fiduciary rule is initially implemented.”
The fiduciary rule, which is currently under review as directed by President Trump, began implementation last month, while certain best interest contract exemption conditions are delayed until January 1, 2018.
The bill is expected to pass the House, but will likely be filibustered by Senate democrats.