Wagner introduces bill to kill DOL fiduciary rule
Legislation would establish a different best interest standard that would require brokers to disclose the compensation they receive and any conflicts of interest that are linked to investment products they sell.
Rep. Ann Wagner, R-Mo., introduced a bill on Wednesday that would kill the Labor Department’s fiduciary rule and establish a best-interests investment standard.
The measure, first released in the form of a discussion draft in July, would require brokers to disclose the compensation they receive and any conflicts of interest that are linked to investment products they sell to clients in a regulation that would be written by the Securities and Exchange Commission.
Ms. Wagner has been one of the most strident congressional critics of the DOL fiduciary rule, which would require brokers to act in the best interests of their clients in retirement accounts. Opponents say the rule is too complex and costly and would price investors with modest assets out of the advice market. Proponents say the DOL rule mitigates broker conflicts of interest that result in the sale of inappropriate high-fee products that erode savings.
“America is in the midst of a savings crisis, and this legislation will ensure it is easier for families to save and invest, not harder,” Ms. Wagner said in a statement. “At the end of the day, every family should have access to affordable investment products and the confidence that their best interest is being served.”
An advocate for the DOL rule asserted that Ms. Wagner’s bill is a weak alternative.
“It’s too bad that Ann Wagner thinks it’s okay to mislead investors by putting out a sham bill that would not be in the their best interests,” said Kate McBride, a founding member of the Committee of the Fiduciary Standard and owner of the consulting firm FiduciaryPath. “They’re basically [introducing] a save-Wall-Street-commissions bill.”
The bill is one of several pieces of legislation by Republicans in the House and Senate designed to stop the DOL rule. The prospects for the legislation are uncertain because Democrats have remained united in opposing efforts to overturn the DOL rule, which was partially implemented in June. Any bill would have to overcome a potential Democratic filibuster in the Senate.
There are no Democratic co-sponsors of Ms. Wagner’s bill, which has not yet been scheduled for a vote in the House Financial Services Committee.
The DOL has proposed delaying for 18 months —from Jan. 1, 2018, until June 1, 2019 — the enforcement mechanisms of the regulation as it conducts a review ordered by President Donald J. Trump that could result in revisions.
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