Sen. Elizabeth Warren, D-Mass., challenged financial firms that have already started to comply with a Labor Department investment advice rule to resist potential Trump administration efforts to delay its implementation.
In
a letter to 33 firms Thursday, Ms. Warren praised them for making changes to their platforms and practices — such as eliminating commissions and lowering fees on mutual funds — designed to satisfy the DOL rule, which sets a best-interests standard for advice on retirement accounts.
But she also warned that the Trump administration could act “as early as Monday” to delay the rule's implementation, which is set to begin April 10, and threw down the gauntlet for the firms.
“Given the work your company has already done to implement this important new rule, I wanted to find out whether you will support the next administration's efforts to reverse the significant progress your company, and many companies industry-wide, have already made toward meeting this higher standard,” wrote Ms. Warren, a member of the Senate Banking Committee.
She asked the firms to answer six questions by Jan. 31. They probed the firms on whether they support the delay, would “increase prices” or reinstate commissions if a delay occurs, how much they've spent on implementation and whether the delay threats have “created uncertainty.”
InvestmentNews reached out to 10 firms targeted by Ms. Warren — from custodians to independent broker-dealers and wirehouses — asking how they planned to respond.
Erika Reynoso, a spokeswoman for
Wells Fargo & Co., said the firm is “proceeding with implementation of the DOL's rule and will wait to hear from the incoming administration before we consider modifying our plans.”
Spokespeople for Morgan Stanley and Charles Schwab & Co. confirmed they received the letter and are reviewing it.
Ms. Warren asserted that the rule helps ensure “adviser fees, commissions and kickbacks aren't draining away the money Americans do manage to save.”
Although individual firms have started complying with the rule and many support it, industry trade associations oppose the rule, arguing it is too complex and costly and will drive up the price of advice.
Those interest groups and congressional Republicans are seeking an implementation delay.
The Consumer Federation of America released a report Wednesday criticizing firms for hiding behind their lobbying organizations' attacks on the rule.
