Washington INsider

Washington INsiderblog

Mark Schoeff Jr. looks at what's really happening on Capitol Hill - and the upshot for advisers.

May 10, 2016, 6:09 PM EST

This insurance group likely to be first to file DOL fiduciary lawsuit

By Mark Schoeff Jr.

Like horses running in the upcoming Preakness, financial industry trade associations may be off to the races on lawsuits against the recently released Labor Department investment advice rule.While the others prance around, it looks as if the American Council of Life Insurers has entered the gate.“The ACLI board of directors has approved exploring the details of a legal challenge to the Department of Labor's fiduciary regulation,” ACLI spokesman Jack Dolan said in a statement responding to an InvestmentNews inquiry. “ACLI will make strategic decisions based on further direction given by our member companies.”This statement reads like the first concrete indication from a financial industry lobbying group that a lawsuit is imminent. It's not likely ACLI staff will return to the board and say, “About that suit – never mind.”The clock is ticking. The effective date of the regulation is June 7. It's... Read full post

Apr 25, 2016, 9:21 AM EST

Lawsuits against fiduciary rule likely to cite DOL's lack of authority

By Mark Schoeff Jr.

So far, all's quiet on the court front when it comes to the recently finalized Labor Department rule to raise investment advice standards for retirement accounts.Three groups that might file a lawsuit against the rule — the Insured Retirement Institute, the American Council of Life Insurers and the U.S. Chamber of Commerce — indicated Monday they're still reviewing the 1,023-page regulation and haven't made a decision on whether to take legal action.“We are reviewing our legal options with our outside counsel, Wilmer Hale,” Jack Dolan, spokesman for the American Council of Life Insurers, wrote in an email. “No decisions have been made at this point.”The IRI and Chamber also said they're still wading through the rule, which was released on April 6, and have not yet made decisions on what to do next.Like the endless speculation about this week's NFL draft, it's never too early to prognosticate about... Read full post

Feb 5, 2016, 3:49 PM EST

Just how much is Hillary Clinton raking in from Wall Street, and what does it mean for advisers?

By Mark Schoeff Jr.

Follow the money. It's advice that's applied to solving crimes as well as determining how politicians will vote and which issues they will support.Sometimes, though, following the money in politics can lead to a dead end — or at least a crossroads. Campaign donations are not always a decisive variable. Democratic presidential candidate Hillary Clinton is getting pummeled by her rival for the nomination, Vermont Sen. Bernie Sanders, over the amount of money she's receiving from the financial industry. Indeed, it's a lot: $17 million so far, according to the Center for Responsive Politics.Ms. Clinton maintains that the campaign largesse won't lull her to sleep on Wall Street reform. She says her plan is the toughest one being offered. Her claim that she can take industry money with one hand and administer tough policy with the other is supported by at least one stance that affects investment advisers and brokers directly. Ms.... Read full post

Jan 13, 2016, 2:58 PM EST

Don't read too much into Obama ignoring DOL fiduciary in State of the Union address

By Mark Schoeff Jr.

President Barack Obama told the nation on Tuesday night that he wants American workers to carry their retirement savings with them wherever their career path leads. But he didn't mention what should happen if they take their savings to a financial adviser. Like many people working in or writing about the investment advice business, I was anticipating that Mr. Obama would use his last State of the Union message to highlight a Labor Department rule that would raise advice standards for retirement accounts. A mention from Mr. Obama, its highest-profile supporter, would have given added momentum to the measure, which was introduced last April and survived an attempt by lawmakers to stop it in the recent omnibus spending bill. At one point, it seemed as if he was on the verge of invoking the DOL rule. In talking about improving “economic security,” he mentioned retraining and wage insurance and retirement plan portability.... Read full post

Nov 3, 2015, 3:17 PM EST

Democrats torn between Obama, financial industry on DOL fiduciary rule

By Mark Schoeff Jr.

Some Capitol Hill Democrats are torn between President Barack Obama and the financial industry over a Labor Department proposal that would change investment advice standards for retirement accounts.In an Oct. 30 letter to DOL, 47 House Democrats called on the agency to open a 15-30 day comment period after a final rule is promulgated, likely early next year. They assure DOL that such an accommodation can be made “without disrupting your intended timeline of implementing the rule by the end of 2016.”The extra comment period would slow down the rule though, as the Obama administration tries to get it in the books before it leaves town in early 2017. Tapping the brakes is something the financial industry wants to do, and now it has nearly four dozen Democrats echoing its stance.This latest letter is much more of a threat to the DOL rule than previous letters from Democrats. One that was signed by 96 House Democrats called for... Read full post

Oct 7, 2015, 3:00 PM EST

Does Hillary Clinton want to protect the DOL fiduciary rule?

By Mark Schoeff Jr.

So far in her presidential campaign, former Secretary of State Hillary Rodham Clinton has not mentioned a Labor Department rule that would change investment advice standards for retirement accounts. But a recent letter to Democratic lawmakers urging them to defend the Consumer Financial Protection Bureau might provide a clue about her thinking.In the letter below, first reported by Politico, she calls on Democrats to oppose legislation recently approved by the House Financial Services Committee that would reform the CFPB structure, transforming it from an agency led by a director to one governed by a five-person commission in a model similar to the Securities and Exchange Commission. At the end of the letter, Ms. Clinton writes, “I also hope you'll stand with me in opposing any other efforts to roll back the Dodd-Frank Act's financial reforms in the upcoming budget and debt ceiling negotiations, including attempts to attach... Read full post

Aug 13, 2015, 3:58 PM EST

If Obama holds firm, here's what the DOL fiduciary rule will end up looking like

By Mark Schoeff Jr.

After four days of hearings at the Labor Department, the fate of a proposal to raise investment advice standards for retirement accounts will be determined by one thing: the strength of President Barack Obama's political backbone.If Mr. Obama holds firm in support of the fiduciary rule, designed to curb conflicts of interest for brokers working with 401(k) and individual retirement accounts, then it will be finalized next spring with modest changes.Where does this week's hearings — in which the DOL heard the usual arguments from dozens of proponents and opponents — leave us?Watching the White House.The bottom line is that the DOL is an executive agency that operates at the will of Mr. Obama. He has said that protecting investors from inappropriate, high-fee investments in their retirement portfolios is a key part of his “middle-class economics” initiative. So if the government sees this priority through, then... Read full post

May 4, 2015, 4:57 PM EST

Finra's longtime critics become its supporters and vice versa

By Mark Schoeff Jr.

Critics of the Financial Industry Regulatory Authority Inc., the industry-funded broker-dealer regulator, have been pining for Congress to delve into the organization's workings with the same fervor it applies to the Securities and Exchange Commission.For the first time in the five years I've been covering Finra, the regulator appeared before a congressional committee on May 1 to discuss itself, not to testify on a particular rule. The result was not what Finra critics had in mind. The majority Republicans did indeed scrutinize the regulator. But they did so from the viewpoint of wanting Finra to put more “self” into “self-regulatory organization”.Rep. Scott Garrett, R-N.J., chairman of the House Financial Services subcommittee on capital markets, wasted no time launching an attack on Finra when he gaveled in a hearing he said would provide “much-needed oversight of Finra.”'DEPUTY SEC'“Despite... Read full post

Apr 30, 2015, 6:51 AM EST

Democratic senators split from White House on DOL fiduciary rule

By Mark Schoeff Jr.

Opposition to a Department of Labor proposal designed to minimize broker conflicts of interest surrounding retirement accounts is once again becoming bipartisan, despite strong White House backing for the measure.The DOL rule was released earlier this month, with a July 6 deadline for comment. The financial industry, which killed a similar proposal in 2011, immediately pushed for a deadline extension, saying more time was required to digest the proposal that runs hundreds of pages.The effort looked like an attempt to delay the rule to death, something the industry and Republicans would welcome. But now Sen. Jon Tester, D-Mont., also wants to extend the comment period. “This is a complex rule that has far-reaching impacts, so Sen. Tester believes we need to ensure folks have time to weigh in,” Dave Kuntz, Mr. Tester's spokesman, wrote in an email. A DOL spokesman declined to comment on whether the agency would extend the... Read full post

Apr 10, 2015, 2:50 PM EST

What a Hillary Clinton presidency would mean for financial advisers

By Mark Schoeff Jr.

It wasn't quite as interminable as the wait for Godot, but Hillary Rodham Clinton is finally arriving on the presidential election scene. At least, if the scuttlebutt today is true: that she's going to announce her candidacy Sunday. What a Hillary presidency — if she were to make it all the way to the Oval Office — would mean for investment advisers and brokers will take a while longer to answer.When the former secretary of state, New York senator and first lady launches her campaign, one question for investment advice professionals will be whether she will listen to Sen. Elizabeth Warren, D-Mass., or to Wall Street on the topic of fiduciary duty.Ms. Warren has embraced raising investment-advice standards for brokers, becoming a champion of a pending Department of Labor rule that would require brokers to act in the best interest of clients when working with retirement accounts. A prominent figure at an event at AARP in... Read full post

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