As ThinkAdvisor’s Melanie Waddell reported (Bill to Kill Fiduciary Rules by SEC, DOL Heads for House Vote), Rep. Ann Wagner’s (R-Mo.) HR 2374, was passed by the full House of Representatives yesterday. The “Retail Investor Protection Act,” as it’s euphemistically titled, was more accurately described by the Financial Planning Coalition (CFP Board, FPA, and NAPFA) in a letter sent on Monday to members of Congress, as “an investor protection bill in name only,” and “a ‘back door’ attempt to undermine investor protection provisions in Dodd-Frank…”
SEC Chairwoman Mary Jo White also weighed in on HR 2374 in a June 18 letter to House Financial Services Committee Chairman Job Hensarling (R-Texas), and ranking member Maxine Waters (D-Calif.), that Wagner’s bill would put “new restrictions on the commission’s authority that would make it difficult for the commission to adopt such a [fiduciary] rule should it determine to do so.”
Here’s what has these folks so worked up about what the Honorable Congresswoman herself describes as requiring the SEC “to perform some common-sense due diligence to determine whether any new rules are necessary.”
In its amazingly short four pages, the Wagner Bill calls for restricting the Department of Labor from redefining advisor fiduciary duties under ERISA until after the SEC issues its final ruling on a fiduciary standard for brokers, and then amending the Dodd-Frank Act to restrict the SEC from issuing any rules before doing the following:
— Identifying whether retail customers are really being “harmed or disadvantaged due to brokers or dealers operating under different standards of conduct” than investment advisors.
— Identifying where a uniform standard for broker and RIAs would “adversely impact retail investor access” to personalized investment advice;
—Having the chief economist of the SEC conduct assessments of the “qualitative and quantitative costs and benefits of the [Fiduciary] rule;