The Insured Retirement Institute chimed in on a bill that would delay fiduciary rules intended to protect retirees from bad or self-serving financial advice.
On Tuesday, the U.S. House of Representatives’ passed the Retail Investor Protection Act, which would force the Securities and Exchange Commission and the U.S. Department of Labor to delay the release of their fiduciary rules.
The bill, if passed by the Senate and signed into law by President Barack Obama, would require the DOL to wait to re-propose its fiduciary rule until 60 days after the SEC issues its fiduciary proposal under Dodd-Frank. The goal is to make sure both agencies work together so companies don’t find themselves at odds with one fiduciary standard when they are attempting to comply with the other agency’s fiduciary standard.
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Proponents of the fiduciary standard, including the Financial Planning Coalition, which is comprised of the Certified Financial Planner Board of Standards, the Financial Planning Association and the National Association of Personal Financial Advisors, see the bill as a way to prevent the SEC and the DOL from engaging in rulemaking crucial to protecting investors.
IRI President and CEO Cathy Weatherford offered a differing view.
“Without proper coordination, and without knowing what the SEC’s harmonized rule will be, there could be a scenario where there are two conflicting rules and unintended consequences for providers of financial information as well as their clients,” Weatherford said. “We will continue to have a constructive dialogue with regulators regarding these issues to ensure that consumers can continue to access information about their retirement plan options.”
The White House has threatened to veto the bill because it would “hinder efforts to protect consumers from conflicts of interest among brokers, dealers, financial advisors and others whose incentives may be misaligned with investors, potentially leading to deceptive and abusive practices.”
The IRI is the leading association for the retirement income industry. It leads a national consumer coalition of more than 20 organizations.