Not so fast—that’s the message from several Republicans and Democrats on the House Financial Services Committee urging President Obama start over on a controversial regulatory proposal for financial advisors.
The Hill reports a letter is being to other congressional members by Reps. Ann Wagner (R-Mo.), Andy Barr (R-Ky.) David Scott (D-Ga.) and Lacy Clay (D-Mo.) warning that the fiduciary proposal put forward by the Obama administration could limit access to quality financial advice for the middle class.
“Given the concerns from stakeholders and a bipartisan group in Congress on this issue, there is a strong possibility that a final rule may widely differ in its substance from the initial proposal or contain provisions that were not part of the proposed regulation,” the letter reads. “As a result, we feel it is in the interest of our constituents that the DOL re-propose this fiduciary regulation to ensure adequate stakeholder involvement in the notice and comment period during a new formal rulemaking process.”
The signers to the letter write that they agree that financial advisors should act in the in best interest of their clients, yet “[h]eightened consumer protections in the investment space should apply broadly and should not create two classes of investors, especially at the expense of those saving for retirement.
The current proposal, they argue, would “bifurcate the industry into those who can afford an advisor and those who cannot. The result will be less choice for consumers and a lack of access for retail investors to sound financial advice.”
“We ask that you join our letter to the Department of Labor asking for a re-proposal on their fiduciary rule-making, in order to ensure that there are no unintended consequences in enforcing a best interest standard that could negatively impact millions of low- and middle-income investors,” They conclude.
As The Hill notes, Wagner has emerged as one of the top critics in Congress of the regulatory push, which is being carried out by the Department of Labor.
The wrinkle is the involvement of Scott and Clay—two prominent members of the Congressional Black Caucus—which indicates there is also skepticism among Democrats about the rule, which the paper notes is strongly opposed by the business community.
The Labor Department scheduled to have a hearing on the issue in early August.
See Also:
- House Approves Measure Blocking DOL ESG Rule
- President Obama to Ease 401(k) Rules in Upcoming Budget
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
