Policy experts at the biggest asset management firms are awaiting Senate passage of the Invest Act, legislation that amends, among other measures, the accredited investor definition; puts 403(b) plans on a level footing with 401(k)s; and promotes e-delivery.
The House passed the legislation, officially the Incentivizing New Ventures and Economic Strength Through Capital Formation Act, by a 302-123 vote Dec. 11. The Invest Act is a package of more than 20 bills to expand the accredited investor definition and access to 403(b) plans, as well as create a task force at the Securities and Exchange Commission to focus on senior investor fraud.
The Invest Act is now being considered by the Senate Banking Committee.
"Time is of the essence" for Senate action on the Invest Act this year, Bryan Wood, managing director and head of federal government affairs at BlackRock, said during a panel discussion at the Investment Company Institute's recent Leadership Summit in Washington. "The legislative window, for the most part, in an election year is a little bit tighter."
Jennifer Flitton, global head of public policy at Invesco, agreed that while there's "a lot of momentum" around the Invest Act, "we're going to have to do a lot to get this across the finish line in a very short time period. ... Once we get into the summer, it really pretty much comes to a grinding halt because members of Congress are focused on the midterm elections."
That said, "that doesn't mean the administration is going to stop," Flitton added.
She noted President Donald Trump's recent executive order directing the Treasury Department to establish TrumpIRA.gov, a comparison site for individual retirement accounts.
Included in the Invest Act is the Fair Investment Opportunities for Professional Experts Act, which expands the accredited investor definition to include inflation-adjusted net-worth and income tests. It also adds certain licensed professionals — including CFPs — and individuals with qualifying education or experience.
The Equal Opportunity for All Investors Act, also included, requires the SEC to direct the Financial Industry Regulatory Authority to create and administer a "new, rigorous investment exam" to earn accredited investor status.
Also included: The Improving Disclosure for Investors Act, H.R. 2441, which requires the SEC to write a rule allowing financial firms to deliver their documents in digital format.
Competing Priorities
There are "competing priorities," Wood noted. The Senate Banking Committee is still working on moving forward with the Clarity Act to advance digital asset market structure, he said, but the committee is "in a position where, when the time is right, they can move [the Invest Act] forward quickly."
There's "urgency" for passage of the Invest Act, said Ben Barasky, head of U.S. advocacy, global public policy at Vanguard. "costs really matter for investors" when it comes to electronic delivery and 403(b)s, for instance. Teachers and nurses should also have access to "lower-cost" investing options in their retirement plans, he said.
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