Lawmakers Press Perez to Redraft DOL Fiduciary Proposal

A group of members of the U.S. House of Representatives Thursday sent a letter to Thomas Perez, secretary of the Department of Labor (DOL), suggesting a re-proposal of its recent fiduciary rule re-proposal

Their concern, just days after the end of the comment period, is that the expansion of the fiduciary definition would hinder Americans trying to save for retirement. The letter was sent just days after the comment period, which ended July 21 and invoked a storm of comment letters from the industry. 

Delivery of financial advice in the retirement savings market is one of the letter’s key points. The Congressional representatives claim the rule would significantly change the way millions of Americans seek help in making investment decisions and the relationships they have with financial advisers. 

While agreeing that advisers should act in their clients’ best interest of their clients, they contend that heightened consumer investment protection should not create two classes of investors—those who can afford an adviser and those who cannot—especially at the expense of those saving for retirement. The proposal, as written, would mean less consumer choice and lack of access to financial advice.

Middle-class Americans would generally be hindered by the proposal, with unnecessary disruptions to existing relationships with advisers, the lawmakers suggest. “It is important that Americans saving for retirement have access to quality information and advice, and Federal regulation should not hinder those striving to save for retirement,” the Congressmen wrote.

The U.K., where smaller investors lost access to advice from financial advisers, is cited as a case study of what could happen if the rule is not implemented correctly. “We are concerned that the rule in its current form could have a disparate impact on access, choice, and costs for millions of low- and middle-income Americans saving for their retirement,” the letter states. “It is critical that the Department continue to work together with appropriate agencies and stakeholders on a balanced approach to both protect investors and maintain affordable access to retirement savings products.”

Rep. Ann Wagner (R-Missouri) was an immediate critic of the re-proposal when it was released in April, and hers is the first signature on the letter.  The other signatories are: Republican Reps. Andy Barr (Kentucky), Ed Royce (California), Robert Hurt (Virginia), Steve Pearce (New Mexico), Lynn Westmoreland (Georgia), Steve Stivers (Ohio), Randy Neugebauer (Texas), Marlin Stutzman (Indiana), Scott Garrett (New Jersey), Bruce Poliquin (Maine), Congressman Blaine Luetkemeyer (Missouri), Frank Lucas (Oklahoma), Mia Love (Utah), Peter King (New York), Bill Huizenga (Michigan), Scott Tipton (Colorado) and Randy Hultgren (Illinois).

Reps. William Lacy Clay (Missouri) and David Scott (Georgia) are the only Democrats who signed.

The letter can be read here.