Two of the most influential players in the long-ranging debateover the merits of the Labor Department’s fiduciary rule satelbow-to-elbow before a House subcommittee on retirement today.

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Dr. Jason Furman, who served as chair of theCouncil of Economic Advisors under President Obama, was responsiblefor generating research that estimated retirement investors lose$17 billion a year to conflicted investment advice, a figure thatprovided the empirical rationale for promulgating the controversialrule.

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Bradford Campbell, a partner at Drinker Biddle& Reath and former head of Labor’s Employee Benefits SecurityAdministration, has been a lead opponent of the rule, and a staunchcritic of Furman’s and the CEA’s research on conflicted advice.

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A fistfight did not break out. In fact, the hearing’stemperament was notably cordial.

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But small moments in their testimony and questioning fromlawmakers served to underscore just how deeply divisive the debateover the fiduciary rule continues to be.

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The two men sat inches apart, vastly accomplished and at thepinnacle of their respective disciplines, an ideological chasmdividing them on where the fiduciary rule should go from here.

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In his opening statement, Campbell called the fiduciary rule the“poster child for inefficient regulation that will hurt the peopleit is intended to help.”

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Without mentioning Furman or the CEA, he said the rule is basedon “rosy academic projections,” and that the real-world evidencethat has emerged as industry prepares to comply with the ruleproves “the academic predictions” behind the rule “were wrong.”

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Campbell said it is “imperative” that the Labor Department delaythe June 9 applicability date of the rule’s impartial conductstandards until the agency completes a new review of the rule.

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In his testimony, Furman maintained that high-fee, low returninvestments serve as a primary risk to the retirement security ofmillions of Americans. In answering a question from Rep. BobbyScott, D-VA, the ranking member on the House Education andWorkforce Committee, Furman made a point of responding toCampbell’s claims.

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“There’s a lot of derision of the academic evidence here—theacademic evidence on this is very clear, very strong, verybipartisan. The report we did was reviewed by outside Republicanand Democrat economists, all of whom agreed with it,” Furmansaid.

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In his written testimony, Furman said the decision to delay theimplementation of the rule’s impartial conduct standards to June 9would potentially transfer “billions of dollars from middle-classsavers to financial institutions.”

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Because the tax code subsidizes savings in IRA and definedcontribution plans, government has “an important role to play” inensuring the security of investments and the quality of advice,Furman noted.

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The CEA’s data will no doubt come under the microscope as theLabor Department issues a new economic analysis of the rule, whichwas ordered by President Trump. The Labor Department has said itexpects to complete that review by January 1, 2018, when the bulkof the rule’s compliance requirements are scheduled forimplementation.

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In theory, if the CEA’s research can be proven to be spurious,then the Trump Labor Department will have more legal latitude torevise the rule, or even rescind it.

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Campbell and other opponents of the rule claim it will crimpsmall investor’s access to advice, and say evidence already existsshowing investment firms are raising minimum investment thresholdsin preparation for complying with the rule.

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In questioning from Rep. Virginia Fox, R-NC, a member of thesubcommittee on Health, Employment, Labor and Pensions, Campbellnoted 2011 data from the Obama Labor Department that said the lackof access to investment advice costs IRA investors $100 billionannually.

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That figure “has to be balanced in the new economic analysis,”said Campbell, who said he was not testifying on behalf of hisindustry clients.

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As written, the fiduciary rule allows commission-basedcompensation on the sale of investment products through the BestInterest Contract Exemption.

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Independent analysts have predicted that the extent ofrequirements under the BIC Exemption, and the threat of litigationunder its private right-of-action provision, will motivateinvestment providers to move IRA investors to fee-basedcompensation models, which will not require use of the BICExemption.

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But fee-based arrangements “have inherent conflicts too,” saidCampbell.

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“You can find a conflict in any form of payment,” he said. Therule is not actually about investors’ best interests, “but howadvisors get paid,” claimed Campbell.

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The House Education and Workforce Committee has written theLabor Department twice recently, calling on the agency to furtherdelay the June 9 implementation date of the impartial conductstandards.

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The HELP subcommittee chair, Rep. Tim Walberg, R-MI, noted thatthe subcommittee has led the fight against the “flawed fiduciaryrule” for years. He called on “holistic” solutions to craftingretirement policy, and expressed concern for robo-advisory modelsthat would benefit under the rule.

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“We have nothing against robo-advisors but people should haveaccess to advice in all forms,” said Walberg.

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Related: Read more DOL Fiduciary Rulecoverage

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