Three Republican senators have banded together to kill the Labor Department's fiduciary rule that requires financial advisers to put their clients' best interests ahead of their own when helping with retirement accounts.
Senators Johnny Isakson of Georgia, Lamar Alexander of Tennessee and Mike Enzi of Wyoming said in a joint statement Monday that they have introduced a resolution to stop implementation of the new regulation released April 6.
The senators believe the regulation “will make retirement planning unaffordable for low- to middle-income Americans whose accounts are not valuable enough for advisers to take on the new legal liability created by the rule.”
However, since the resolution faces an all-but-certain veto by President Barack Obama, a staunch supporter of the DOL rule, it is largely seen as a symbolic gesture.
The financial advice industry has until January 2018 to fully comply with the DOL regulation, which was proposed about a year ago.
“I have worked to fight the implementation of this harmful rule since it was first proposed and promised to do all I could to overturn it before it can harm Georgia families,” Mr. Isakson, who is the lead sponsor of the resolution, said in the statement.
Advocates for the rule say it would curb conflicts of interest for advisers that lead them to recommend high-fee investments that erode retirement savings.
A resolution of disapproval needs a simple majority to pass and cannot be filibustered or amended, if acted upon during a 60-day window, according to the senators' statement.