A group of "Main Street" financial advisors has formed to fight the Department of Labor's proposed fiduciary rule.
The new group, the Coalition to Protect Retirement Security and Choice, characterizes itself as "a partnership of local financial advisors, insurance agents, and life insurance companies" that "are working to fix a proposed regulation from Washington that would make it harder and more expensive for average Americans to get trusted savings advice and financial solutions as they plan for retirement."
This coalition is led by "nine local advisors who serve as Co-Chairs," and it is sponsored by the American Council of Life Insurers.
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Other industry trade groups, in addition to the new coalition, oppose the rule, claiming that it will limit retirement plan participants to seeking advice through robo-advisors because of cost and will thus put them at a disadvantage. Debate has been hot and heavy.
The rule–which has received support from the CFP Board, the Financial Planning Association, and NAPFA, banded together as the Financial Planning Coalition–aims to require those who provide retirement advice to adhere to a fiduciary standard.
The criticism mentioned above, of course, is among those leveled at the rule by its opponents—the potential for increased costs for retirement plan participants, as well as the possibility that it could be more difficult for consumers to get advice, depending on the compensation models of potential advisors.
Other industry gripes are the potential for greater liability for advisors to small plans, the need for greater and clearer fee disclosures, and the potential for employers to cut back on efforts to get employees involved in their retirement plans and to educate them about their choices.
The DOL has for its part, of course, defended the proposed fiduciary rule, saying that it won't limit access to advice or result in higher costs to consumers, in part because of the demographics of small-IRA owners.
Consumer interest groups and unions, among others, have supported the rule.
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