Controversial legislation dealing with fiduciary standard regulations being considered by the Securities and Exchange Commission and the Department of Labor was passed today by the House Financial Services Committee.
It was approved by the committee, 44-13.
It is now being “sequentially referred” to the House Education and Workforce Committee.
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However, industry analysts see the bill has little likelihood of being enacted and they are focusing on have a proposal expected to be reintroduced in the fall by the DOL substantially revised.
In the unlikely event the bill is enacted, the bill would at least delay or perhaps kill imposition of a uniform fiduciary standard by the SEC.
It also would delay and possibly kill an initiative by the DOL to update the standard of care imposed on those who sell retirement investment products, according to industry officials.
That rule, not the SEC rule, is of the deepest concern to the industry.
The bill is H.R. 2374. It is sponsored by Rep. Ann Wagner, R-Mo.
The National Association of Insurance and Financial Advisors is not taking a position on the Wagner bill, according to several people close to the trade group.
“They support the goals but not the substance of the bill,” one lobbyist explained.
Duane Thompson, a senior policy analyst at fi360, said the legislation is unlikely to be enacted in this Congress with the current makeup of the Senate.
Related story: SEC, DOL approach fiduciary standard from different angles
That would change in 2015 if Republicans gained control of the Senate and retained control of the House, he said.
He said, however, that does not mean the legislation shouldn’t be monitored.
The committee is also proceeding despite strong outright opposition from a large number of investment advisory groups.
Opponents include the AARP, the Consumer Federation of America, North American Securities Administrators Association, the Financial Planners Association, the Certified Financial Planners Board of Standards, Investment Advisor Association, Investment Advisors Association and the National Association of Personal Financial Advisors.
Another lobbyist acknowledged that it is unlikely that the Wagner bill will ever become law, and that most investment advisors are instead focusing on the DOL proposed regulation, scheduled to be re-proposed in the fall.
“The DOL is saying that its revised proposal will be a ‘no conflict’ rule, but most advisers believe it will ultimately be a ‘no advice’ rule,” one lobbyist said.
“We are focused on stopping that,” the lobbyist said, “because the result will be to make it too risky for advisors to provide advice to the middle market on retirement investment products.”