The industry groups working to scuttle the Department of Labor's fiduciary proposal hit a setback this week on Capitol Hill, but are vowing to continue to fight.
Lawmakers indicated that they had reached a deal on a spending bill to keep the government funded, but that agreement does not include a provision to delay the DOL's controversial proposal to extend fiduciary responsibilities to advisers working with retirement savers and plans.
Trade organizations that oppose the rule had been hoping the omnibus bill would include a rider that would require the department to publicly respond to the first round of comments it had collected on the rule, offer revisions and hold a second comment period.
Groups like FSI have been warning that the rule would force retirement advisers to abandon commission sales, and inevitably reduce access to advice for lower-income Americans and limit the plans available to small businesses.
After it became clear that the omnibus spending bill would not address the DOL's proposal, FSI CEO Dale Brown urged lawmakers not to abandon the issue.
"Congress not only has the right, but the duty, to fulfill their legislative role and protect retirement savers," Brown says. "The odds of passing an omnibus bill with a rider to protect retirement investors from the Department of Labor's fiduciary rule, however, were always slim. But that rider is not Congress' only chance to act."
SIFMA chief Kenneth Bentsen, Jr. issued a statement calling for the DOL to repropose the rule to address the numerous issues that opponents have raised. Cathy Weatherford, CEO of the Insured Retirement Institute, notes the bipartisan criticism the fiduciary proposal has run into on Capitol Hill.
"[I]t is imperative that Congress has its say on this matter," Weatherford says in a statement. "We are at a critical juncture in the rulemaking process where these concerns need to lead to an appropriate response that addresses these issues."
Investor advocates and members of the financial-planning industry who support the Labor Department's rule and see it as a needed consumer protection against conflicted advice praised lawmakers for excluding the fiduciary rider from the omnibus bill.
"Retirement investors need — more than ever — un-conflicted advice that is in their best interests," the Financial Planning Coalition said in a statement. "Now, by agreeing on a funding bill without the rider, and allowing the DOL to proceed with its rulemaking without further delay, members of Congress can take an important step to strengthen retirement security for Americans."
FPC members and other supporters of the fiduciary proposal have said that any effort to delay a final rule by requiring another round of comments and a reproposal would simply amount to an attempt to run out the clock on the Obama administration that favors the rule. Whether a new administration, likely with a new cast of senior officials at the Labor Department, would take up the contentious fiduciary issue is anything but certain.
In the meantime, the FSI is not giving up the fight on the Hill. Brown lauds the efforts of a bipartisan group of House members who are working on legislation that would codify retirement advisers' fiduciary responsibilities but provide more flexibility for advisers' business practices than the DoL proposal.
Brown also noted the interest in the issue that some members of the Senate have taken, and is calling on advisers to make their voices heard as the fiduciary rule remains a live issue.
"This is why all advisers must get engaged in the legislative process and advocate for hard-working Americans trying to save for a dignified retirement," he says.
Kenneth Corbin writes for Financial Planning, a SourceMedia publication.
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