The Financial Planning Coalition has sent a letter to all members of Congress strongly urging them to reject any legislative proposal that would block the Department of Labor’s effort to finalize and implement a new fiduciary rule.
The Financial Planning Coalition advocates for the comprehensive application of fiduciary standards for financial advisors.
Its letter alludes to an outline of legislation drafted in early November by two Democrats and two Republicans in the House of Representatives that would serve to replace the extensive fiduciary regulation the DOL has promised to finalize by the end of the Obama administration.
The legislation from the four Congressional members is based on seven principles. One says all “public policies must protect access to investment advice and education for low and middle-income workers and retirees.”
Critics of the DOL’s rule argue its extensive disclosure and prohibited transaction requirements will make low-value accounts too expensive to administer for IRA and plan providers.
Consequently, low and middle-income Americans with small retirement accounts will struggle to get access to retirement advice, say the critics.
A recent report from analysts at Morningstar estimated up to $600 billion of low-value IRA accounts would be let go by full-service wealth management firms if the DOL’s rule is finalized as proposed.