Fiduciary Rule Hearing Kicks Off Political Football Season

The Department of Labor’s push for a stricter fiduciary standard will battle for attention amid bigger political fights this fall.

Whether the proposed changes to conflict of interest rules governing retirement advice emerge intact is hard to predict. With Congress returning to work this week, first up is a Thursday subcommittee hearing by the House Financial Services Committee.

The hearing will feature five speakers discussing the impact of the DOL proposal on retail investors, retirement savers and the economy. Also, the panel will vet the Retail Investor Protection Act, expected to be re-introduced by Rep. Ann Wagner, R-Mo.

The legislation will be a key point of discussion for NAIFA President Juli McNeely, who is one of the speakers covering a variety of subjects.

“They really wanted us to cover some very specific things, like how will this impact consumers directly… what are the problem areas and what should be changed,” said McNeely, who added that she will have only five minutes to speak.

But it’s what will happen in the coming weeks that have partisans on both sides nervous and unable to predict an outcome. Rule opponents say they can win their fight via a “rider” prohibiting the DOL from implementing its fiduciary rule.

Such a rider would be attached to a forthcoming continuing resolution needed to keep the government running. Whether President Barack Obama – a strong supporter of the fiduciary rule – would veto a resolution containing this rider isn’t known.

What is known is the White House has much bigger fights on its hands. The GOP’s conservative wing wants to focus its fight on defunding Planned Parenthood.

Meanwhile, there’s “a lot of jockeying” going on pointing out where the fiduciary proposal could be thwarted, McNeely said.

Fiscal issues are also expected to dominate the remaining months of 2015. The federal Highway Trust Fund is due to run out of money at the end of October, and the federal debt ceiling could be maxed out a month later.

These issues have the potential to shut down the government, and are likely to draw more attention from Obama. The prospect of political horse trading and where it may leave the fiduciary rule has some opponents nervous.

“We’re entering into an election year and the dynamic is really interesting,” McNeely added. “There’s bipartisan support for many of the things that are being speculated. I think more will become clear after this hearing this week.”

On Tuesday, the DOL released a study showing that Americans with access to a financial advisor are better prepared for retirement.

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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