Bills to expand accredited-investor pool, reform retirement savings, protect seniors poised to return in 2017

Bills to expand the pool of investors eligible to buy unregistered securities, make it easier to put annuities in 401(k)s and stop a Treasury Department rule changing estate valuations are likely to be revived.
DEC 22, 2016
Legislation that would expand the pool of investors eligible to buy unregistered securities, make it easier to put annuities in 401(k) retirement plans and stop a Treasury Department rule changing estate valuations are likely to be revived in 2017 after dying in this year's Congress. The House and Senate wrapped up the congressional lame-duck session without acting on the measures and without confirming two nominees to the Securities and Exchange Commission — Republican Hester Peirce and Democrat Lisa Fairfax. The legislation will now have to be reintroduced in the next Congress, which begins on Jan. 3. The Trump administration will have to submit SEC nominees — possibly two new ones — as well as a new agency chairman to the Senate for confirmation. Here's a rundown of the bills that did not make it across the finish line: ACCREDITED INVESTOR REFORM In December, the House approved, 391-2, a package of bills designed to make it easier for start-up companies to raise capital. One of the measures would expand the definition of accredited investor — someone who can participate in private placements — to include people who have securities licenses, such as investment advisers and brokers. Currently, the definition is based on income — more than $200,000 for an individual — and net worth — more than $1 million excluding the value of a home. An advocate for broadening the standard is confident that the measure will return next year. “I think it will be part of a package in the spring,” D.J. Paul, co-chair of the Crowdfund Intermediary Regulatory Advocates, said. “There seems to be an appetite for dealing with this issue.” RETIREMENT SAVINGS REFORM In November, the Senate Finance Committee introduced a bill, the Retirement Enhancement and Savings Act of 2016, that would make it easier for plans 401(k) sponsors to include annuities in the plans and would require lifetime income disclosures in statements, among other provisions. The legislation did not make it out of the Senate, but the committee chairman, Sen. Orrin Hatch, R-Utah, will bring it back. “In the new Congress, Chairman Hatch will work with members of the committee and Senate leadership to advance the bipartisan policies found in the [bill] that will assist employers, beneficiaries and hard-working Americans save the for the future,” committee spokesman Aaron Fobes wrote in an email. ESTATE TAX VALUATION RULE In August, the Treasury Department proposed a rule that would curb valuation discounts for estate taxes. The measure drew strong resistance from Capitol Hill. But bills introduced by Rep. Warren Davidson, R-Ohio, and Sen. Marco Rubio, R-Fla., were not approved by Congress. Those bills could be reintroduced and other avenues to stop the regulation also will be pursued next year, said Palmer Schoening, chairman of the Family Business Coalition. For instance, if the regulation is not finalized before Inauguration Day, the Trump Treasury Department could nullify it. If it does go final before then, the new Congress could pass a resolution to kill it. “We're taking an all-of-the-above approach,” Mr. Schoening said. He's hopeful that the estate tax will be scrapped next year as part of broader tax reform because President-elect Donald Trump supports getting rid of the levy. “There's going to be a lot of pressure on Congress to repeal the death tax,” Mr. Schoening said. SENIOR SAFE ACT A bill that would give liability protections to financial advisers reporting financial abuse of elderly investors was not able to make it through the Senate, despite its author's plea for a senator putting a hold on the bill to relent. “I am greatly disappointed that we have been unable to overcome objections from just one senator from the other side of the aisle who is blocking the passage of the Senior Safe Act, legislation I introduced to help protect seniors from financial fraud and exploitation,” Sen. Susan Collins, R-Maine, said in a Dec. 8 floor speech. It is unclear when Ms. Collins and her co-author, Sen. Claire McCaskill, D-Mo., will reintroduce the bill next year.

Latest News

KKR drums up more than $850M for real estate credit fund
KKR drums up more than $850M for real estate credit fund

The titanic alternative asset manager sees potential for deals offering a compelling measure of safety.

Number of CFP professionals reaches fresh worldwide record
Number of CFP professionals reaches fresh worldwide record

The global body overseeing the CFP mark hails milestone year, with the US accounting for most of the 230,000 plus planners now holding the designation.

Ackerman promoted at Integrated Partners, Robertson Stephens strengthens board
Ackerman promoted at Integrated Partners, Robertson Stephens strengthens board

Some of this week's hires across the wealth and investment industry

Emergency savings dynamic shifts to positive for first time in three years
Emergency savings dynamic shifts to positive for first time in three years

More Americans have added to their savings than depleted them.

Muted week for stocks, bonds amid data, trade, conflicts
Muted week for stocks, bonds amid data, trade, conflicts

Some big headlines have made many investors cautious this week.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.