The head of the Senate Homeland Security and Governmental Affairs Committee recently told Labor Secretary Thomas Perez to halt implementing the Department of Labor’s “burdensome” fiduciary rule because it will likely be “undone” by the incoming Trump administration.
In a Nov. 22 letter to Perez, Sen. Ron Johnson, R.-Wis., chairman of the committee, told Perez that like DOL’s overtime rule, which was halted recently by a Texas federal judge, there is also “substantial likelihood” that DOL’s fiduciary rule will be dismantled.
Johnson’s letter comes as a new study was released Wednesday, finding that advisors in the U.S. are likely to abandon mass-market clients because of Labor’s fiduciary rule.
“I urge the Labor Department to cease implementation of the regulation immediately to spare low- and middle-income Americans, financial advisors and small businesses from the unnecessary and avoidable burdens that will drive up the costs of services and decrease access,” Johnson told Perez in his letter. “I hope the Labor Department will acknowledge the reality of the situation and avoid imposing unnecessary costs and burdens in further implementation of regulation that will very likely be rescinded.”
In late February, Johnsnon released a study that charged DOL with “ignoring and rejecting” concerns raised by the Securities and Exchange Commission on how to craft its rule to change the definition of fiduciary on retirement advice, resulting in a “flawed process” in devising a plan that “could ultimately hurt American retirement savers.” Johnson’s committee also held a hearing in April on DOL’s rule.