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Rep. Wagner Drafts Bill to Kill DOL Fiduciary Rule

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House lawmakers plan to convene a hearing Thursday to discuss the impact of the Department of Labor’s fiduciary rule on the capital markets. The hearing will focus on a draft bill put forth by Rep. Ann Wagner, R.-Mo., that seeks to kill the fiduciary rule and instead impose a best interest standard on broker-dealers’ investment recommendations.

The Consumer Federation of America sent a letter Tuesday to members of the committee expressing “strong opposition” to the measure, stating that it “would dramatically weaken existing protections for retirement savers without providing meaningful new protections for investors in non-retirement accounts.”

Thursday’s hearing will be held by the House Committee on Financial Services Subcommittee on Capital Markets, Securities and Investment.

Barbara Roper, the Consumer Federation’s director of investor protection, along with Micah Hauptman, the group’s financial services counsel, argued in the letter that Wagner’s bill would repeal Labor’s rule “just as it is beginning to deliver the best interest advice that retirement savers need and deserve.”

Since the rule was finalized more than a year ago, “firms have announced implementation plans that show that the rule is reducing the cost of advice, improving the quality of investment products, and preserving access to advice through both fee and commission accounts for even the smallest account holders,” Roper and Hauptman wrote.

“Indeed, since brokers and insurance agents are now required to provide fiduciary advice and not just self-interested sales recommendations dressed up as advice, retirement savers’ access to genuine advice has been dramatically expanded as a result of the rule,” they explained.

What’s “preventing retirement savers from receiving the full potential benefits of the rule is uncertainty over its ultimate fate as a result of the Trump administration’s reconsideration of the rule,” Roper and Hauptman added.

On June 29, Labor published a request for information regarding its fiduciary rule, seeking feedback on 18 questions.

Jerome Lombard, president of Janney Montgomery Scott’s Private Client Group, will testify on behalf of the Securities Industry and Financial Markets Association during the Thursday hearing before the Capital Markets Subcommittee. David Knoch, president of 1st Global, will be testifying on behalf of the Financial Services Institute.  

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