House GOP Members Press Fight Against DOL Rule

While the most disliked aspects of Department of Labor fiduciary rule are expected to be officially delayed any day now, lawmakers continue to push legislative alternatives.

Last week, Rep. Ann Wagner, R-Mo., introduced a bill to create a new advisory standard somewhere between fiduciary and suitability. It would amend the Securities Exchange Act of 1934 to include a best interest standard of care for brokers advising investors in the retail market.

The Wagner bill joins legislation reported out of the House Committee on Education and the Workforce in July.

The Affordable Retirement Advice for Savers Act rolls back the Obama administration’s fiduciary rule and amends federal law to require financial advisors to act in the best interests of their clients.

“A rule requiring retirement advisers to serve their clients' best interests is completely pointless if it means many Americans won't have access to retirement advice at all,” wrote Reps. Virginia Foxx, R-N.C., and Phil Roe, R-Tenn., in a Thursday op-ed in the Washington Examiner.

A U.S. Chamber of Commerce report found that 71 percent of advisors surveyed will stop providing advice to some of their clients with small account balances, the legislators said.

Likewise, the report found that up to 7 million retirement savers may lose access to retirement advice altogether.

It is unclear if either the Wagner bill or the Foxx/Roe bill will get a full vote on the House floor. In either case, the Senate is unlikely to concur. Wagner introduced several similar bills in recent years, and none of them have made it to the president’s desk.

Meanwhile, final publication of an 18-month fiduciary rule delay is expected soon in the Federal Register. The move will delay phase two of the rule, which deals with exemptions that regulate the sale of annuities sold with retirement funds, until July 1, 2019.

In particular, the rule includes the Best Interest Contract Exemption, which requires a financial institution to accept liability for each contract and gives clients the right to sue over investment advice.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.