The Financial Planning Coalition has sent a letter to allmembers of Congress strongly urging them to reject any legislativeproposal that would block the Department of Labor’s effort to finalize andimplement a new fiduciary rule.

The Financial Planning Coalition advocates for the comprehensiveapplication of fiduciary standards for financial advisors.

Its letter alludes to an outline of legislation drafted inearly November by two Democrats and two Republicans in the House ofRepresentatives that would serve to replace the extensive fiduciaryregulation the DOL has promised to finalize by the end of the Obamaadministration.

The legislation from the four Congressional members is based onseven principles. One says all “public policies must protect accessto investment advice and education for low and middle-incomeworkers and retirees.”

Critics of the DOL’s rule argue its extensive disclosure andprohibited transaction requirements will make low-value accountstoo expensive to administer for IRA and plan providers.

Consequently, low and middle-income Americans with smallretirement accounts will struggle to get access to retirementadvice, say the critics.

A recent report from analysts at Morningstar estimated upto $600 billion of low-value IRA accounts would be let go byfull-service wealth management firms if the DOL’s rule is finalizedas proposed.

A portion of those accounts would likely find a home inpassively managed investments offered by robo-advisors, which stand to benefitfrom the rule, Morningstar’s report said.

The “declaration of principles” that the four Congressionalmembers plan to use to craft replacement legislation to the DOLrule do not go nearly far enough to ensure Americans are protectedfrom conflicts of interest in the financial advice they get, saysthe Financial Planning Coalition.

“These principles refer only to disclosure of conflicts ofinterest; but are completely silent on a fundamental component ofthe fiduciary standard-- an obligation to mitigate compensationpractices and incentives that give rise to conflicts of interest,”says the Financial Planning Coalition’s letter to Congress.

The Coalition also warns against the tactic of attaching anappropriations rider to the omnibus funding bill, which will directexactly how money in the bi-partisan budget bill that was recentlysigned into law will be spent.

The omnibus bill is needed by December 11 in order to avoid agovernment shutdown.

Supporters of the DOL’s fiduciary rule have long considered anappropriations rider the primary arrow in the quiver of opponentsto the rule.

See all BenefitsPro coverage on the Department of Laborproposed fiduciary rule