Another bill to take down the fiduciary rule, the Affordable Retirement Advice for Savers Act, has been introduced -- here's what it offers.(Photo: Getty).

The Affordable Retirement Advice for Savers Act, which would repeal the Labor Department’s fiduciary rule and replace it with a disclosure-based best interest advice standard, passed out of the House Committee on Workforce and Education on a party line vote.

Related: Would GOP alternatives to fiduciary rule raise the suitability standard?

It now moves to a full floor vote in House.

Introduced by Rep. David Roe, R-TN, the bill would amend the Employee Retirement Income Security Act to create a new best interest standard, and restore the prohibited transaction exemptions the fiduciary rule amended.

The rule’s Best Interest Contract Exemption, designed to enforce a fiduciary standard of care on all transactions in qualified retirement accounts, would be revoked.

The bill defines investment advice with language similar to the fiduciary rule.

But it also gives brokers, advisors and their firms’ substantial latitude to disclaim their fiduciary status through disclosures.

Democratic lawmakers on the committee characterized the bill’s disclosures as “loopholes” that would allow “unscrupulous” advisors gouge retirement savers.

Under the bill’s fiduciary standard, advisors would be required to acknowledge their requirement to render advice in the best interest of the investor. But they would also be able to craft language in contracts limiting ongoing monitoring responsibilities of clients’ investments.

Related: Quick look at Rep. Wagner’s bill to kill fiduciary rule

Brokers and advisors could also disclaim their fiduciary responsibilities by providing contractual language saying: “This communication is not individualized to you, and you are not intended to rely materially on this communication in making investment or management decisions.”

That provision counters language in the fiduciary rule that some in industry claim restricts the level of education service providers can communicate to clients.

In effect, service providers under Roe’s bill would be free to choose how to communicate in sales and marketing material without triggering the best interest requirement, so long as those materials included a disclosure that they are not intended to be investment advice.

Investment platforms, and advisors to workplace plans and individuals would be able to provide sample asset allocation models with specific investments without triggering the best interest standard. Under the current fiduciary rule, that would trigger fiduciary status.

Advisors would be able to more freely communicate options on IRA rollovers or distributions from workplace retirement plans without triggering fiduciary status, so long as examples of distribution options are “accompanied by all material facts and assumptions.”

The bill relies on ERISA’s long-standing reasonable compensation requirement. Recommendations on proprietary products would not trigger a prohibited transaction, as they do under the fiduciary rule, so long as advisers disclose that other options are available at different price points.

Variable compensation across different investments could also satisfy the bill’s best interest standard, so long as the different levels of compensation are disclosed. Under the fiduciary rule, that triggers a prohibited transaction, and requires use of the Best Interest Contract Exemption.

Third-party payments from investment managers and insurance companies would also be allowed, so long as they are disclosed. Under the fiduciary rule, those too are prohibited transactions that require the use of new exemptions.

For all compensation disclosures, advisors and firms could include a range of expected compensation. They would only have to provide specific compensation levels if investors requested them.

In the event disclosures are not provided, firms and advisers would have 30 days to correct the issue. If brokers fail to provide advice in clients’ best interest, they are required to reimburse the actual damages to the investor.

Rep. Alma Adams, D-NC, introduced an amendment to codify the existing fiduciary rule into law. It was voted down on partly lines.

Letters from prominent consumer advocacies were introduced into the record during the mark-up hearing.

The Consumer Federation of American said the best interest standard in Roe’s bill is “in name only.”

Under the bill’s disclosures, “a retirement saver could reasonably believe she was receiving personalized advice, rely exclusively on that advice in making her investment decision, and still not be deemed to be in an advisory relationship under the terms of the bill so long as the adviser provided the required boilerplate disclaimer,” claimed the CFA in its letter.

The bill is expected to pass the House on the strength of the Republican majority. But it would need 60 votes to survive a filibuster in the Senate, a much higher threshold.

Related: See more fiduciary rule coverage