Provision to kill DOL fiduciary rule included in new bill to replace Dodd-Frank

Measure also contains requirement for SEC to conduct 'rigorous' cost-benefit analysis before proposing its own fiduciary-advice rule

Sep 9, 2016 @ 3:50 pm

By Mark Schoeff Jr.

Republican lawmakers haven't given up on trying to kill a Labor Department rule that would change investment advice standards for retirement accounts.

House Financial Services Committee Chairman Jeb Hensarling, R-Texas, introduced a bill Friday that includes a provision to repeal the DOL rule, according to spokesman Jeff Emerson.

Mr. Hensarling started revealing details about the bill in June. The House financial panel will begin debating and voting on the bill Tuesday.

(Related read: FAQs: The most comprehensive fiduciary database)

The measure also contains a provision requiring the Securities and Exchange Commission to conduct a “rigorous” cost-benefit analysis before proposing its own advice rule that pertains to all retail accounts.

The final version of the DOL rule, which requires advisers to 401(k) and individual retirement accounts to act in the best interests of their clients, was released in April.

A congressional resolution to stop the rule was vetoed by President Barack Obama, who asserts that regulation is needed to protect workers and retirees from conflicted advice that results in the sale of high-fee investment products that erode retirement savings.

Republican and industry critics of the rule assert it would impose regulatory burdens and liability risks on advisers that would sharply increase the expense of giving and receiving advice.

(Related read: The DOL fiduciary rule will forever change financial advice, and the industry has to adapt)

“The administration's complicated red tape will just make that advice more costly and less available for workers and retirees with modest incomes,” Mr. Hensarling said in April, after his vote in favor of the House resolution. “Congress must act to stop this misguided regulation that's unfair to Americans who only want the freedom to plan for financial independence and the right to shape their own future.”

It's unclear how far Mr. Hensarling's bill — the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) — will advance before the end of the congressional session in December.

Voting on it in committee now lays the foundation for Mr. Hensarling to reintroduce it in the new Congress next year.

Republicans might also try to halt the DOL rule with a rider on a federal spending bill that is working its way through Congress but may not get a final vote until the lame-duck session after the election.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

When can advisers expect an SEC fiduciary rule proposal and other regs this year?

Managing editor Christina Nelson and senior reporter Mark Schoeff Jr. discuss regulations of consequence to financial advisers in 2018, and their likely timing.

Recommended Video

Path to growth

Latest news & opinion

Bond investors have more to worry about than a government shutdown

Inflation worries, international rates pushing Treasuries yields higher.

Morgan Stanley reports a loss of advisers after exiting the protocol for broker recruiting

The firm said it lost 47 brokers in the fourth quarter, the most in any quarter of 2017.

Morgan Stanley's wealth management fees climb to all-time high

Improvement reflect firm's shift of more clients into fee-based accounts priced on asset levels, which boosts results as markets rise.

Legislation would make it harder for investors to sue mutual funds over high fees

A plaintiff would have to state in their initial complaint why fiduciary duty was breached, and then prove the violation with 'clear and convincing evidence.'

Relying on trainees, Merrill Lynch boosts adviser headcount in 2017

Questions remain about long-term effectiveness of wirehouse's move away from recruiting experienced brokers.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print