Republican legislative leaders voiced concerns on Wednesday about new fiduciary rules announced by the Department of Labor to regulate financial planning for retirement.
Under the rules, financial advisors will be required to act in their clients’ best interest when consulting on investments rather than the previous standard that required brokers to provide “suitable” investment advice, the Wall Street Journal reports.
U.S. Reps. Kevin Brady (R-TX), the chairman of the House Ways and Means Committee, and Peter Roskam (R-IL), the chairman of the Ways and Means Subcommittee on Oversight, joined Education and the Workforce Committee Chairman John Kline (R-MN), and Education and Workforce Subcommittee on Health, Employment, Labor, and Pensions Chairman Phil Roe (R-TN) and in urging a more balanced approach.
“Helping more Americans plan for retirement is a priority we all share,” the legislators said in a joint statement. “That’s why we have repeatedly expressed our belief that retirement advisors should serve their clients’ best interests and then put forward bipartisan reforms that would require just that. It’s also why we urged the department to pursue a balanced approach and why we remain concerned with the far-reaching consequences of this final regulation.”
Roskam previously introduced the Strengthening Access to Valuable Education and Retirement Support Act, H.R. 4294, and Roe introduced the Affordable Retirement Advice Protections Act, H.R. 4293, to enhance investment advice standards and ensure that financial advisors act in their clients’ best interest.
The House Ways and Means Committee approved the bipartisan measures earlier this year.
“We continue to have serious concerns that these new rules will make it harder for low- and middle-income families to receive basic education about retirement savings and will create new hurdles for small business owners who want to offer their workers retirement options,” Brady, Roskam, Roe and Kline said. “These are consequences working families and job creators cannot afford. Now that the department has put forward a final rule, we plan to review it thoroughly. We remain committed to using the tools we have to help all Americans retire with the financial security and peace of mind they deserve.”
U.S. Rep. Bruce Poliquin (R-ME), a member of the House Financial Services Committee, said that he would closely review the administration’s final fiduciary rule to determine its impact on working families saving for retirement.
“Our policies should make it easier to save for retirement, reduce barriers for savers, and ensure our families are protected and have access to sound advice on their important investments,” Poliquin said. “I will do everything to ensure that reasonable retirement is an achievable dream for all those who have spent their lives working toward it.”
U.S. Rep. Leonard Lance (R-NJ), meanwhile, said that the administration should not be issuing rules and enacting policies that restrict peoples’ access to affordable financial advice.
“I have serious concerns that the new fiduciary rules issued today by the U.S. Department of Labor will make it more difficult for working families to receive basic education about retirement savings and will create new cumbersome hurdles for small business owners who want to offer their employees retirement options,” Lance said. “I call on Congress to review these new rules thoroughly and consider bipartisan legislation that provides the tools to help all Americans retire with the financial security and peace of mind they deserve.”
U.S. Rep. Mike Kelly (R-PA), who previously introduced the Retirement Choice Protection Act, H.R. 3922, to establish a workable “best interest” standard, said that Washington bureaucrats think that they know what’s best for families planning for retirement.
“This administration’s misguided attempt to regulate Main Street financial advisers will backfire, leaving more hardworking families without access to quality, affordable retirement advice,” Kelly, the chairman of the House Retirement Security Caucus, said. “With increased compliance costs and regulations, these smaller advisers will be unable to provide workers and seniors with a full range of options to help save for a secure retirement. As I have done in the past, I look forward to working with my colleagues to avert unnecessary hardship for Americans caused by this unfair rule.”
House Majority Whip Steve Scalise (R-LA) said that families planning for retirement should be able to seek the financial advice that best meets their needs.
“Unfortunately, the Obama administration has ignored the opinion of the American people, manifested in the thousands of comments criticizing this massive government overreach,” Scalise said. “(Wednesday’s) destructive final ruling from President Obama’s Department of Labor will harm millions of lower and middle income Americans by limiting investment choices, reducing retirement options and raising the costs of financial planning. The House committees on Ways and Means, Financial Services, and Education and the Workforce have worked tirelessly to hold the administration accountable during the rule making process. The House will continue to fight this Washington-knows-best, one-size-fits-all radical regulation.”