A group of financial advisers has launched an effort to stop a Labor Department proposal that would raise investment advice standards for brokers working with retirement accounts.
The Coalition to Protect Retirement Security and Choice is comprised of nine adviser co-chairs and a steering committee of more than 30 advisers and insurance agents. The effort is sponsored by the American Council of Life Insurers and also includes support from the National Association of Insurance and Financial Advisors and other groups.
The initiative's goal is to amplify resistance to the DOL rule, which is designed to reduce conflicts of interest for brokers working with 401(k) and individual retirement accounts.
Supporters say the rule will protect the savings of workers and retirees by curbing incentives brokers receive to put clients into high-fee investments. Opponents, such as the brokerage and insurance industries, argue it will significantly raise liability risk and regulatory costs for brokers, making advice more expensive to give and receive.
Advisers leading the coalition echo industry concerns that the DOL rule would curtail access to investment advice for investors with modest assets.
“[My clients] trust and rely on me to help them plan and save for retirement, but this regulation in Washington would put barriers between us by both limiting the way I can speak to my clients and by limiting my ability to offer products that they rely on for a secure retirement,” Kathy Davenport, a New York Life insurance agent, NAIFA member and co-chair of the coalition, said in a statement.
The coalition has established a website that allows advisers and others to sign a petition against the rule.
The site is similar to one established earlier this year by the Financial Services Institute to encourage investors to write to members of Congress and the DOL expressing their opposition to the rule.
On the other side of the debate, advocates have been collecting signatures on petitions in support of the DOL rule at the website Save Our Retirement. In addition, AARP has conducted a petition campaign in favor of the rule.
The grassroots efforts contribute to the increasing political tension surrounding the DOL rule, which was proposed in April with strong White House backing. A bill to halt the rule was passed on Sept. 30 by the House Financial Services Committee on a nearly party-line vote. That bill will next move to the full House floor.
A final rule is expected early next year.