Bills were introduced in the House and Senate last week that would overturn the Department of Labor’s (DOL) fiduciary rule on investment advice, which went into effect on June 9.
The Affordable Retirement Advice for Savers Act, introduced in the House by Reps. Phil Roe (R-TN) and Peter Roskam (R-IL), would require financial advisors to serve their clients’ best interests but change the fiduciary standard.
It would also enhance transparency and accountability through disclosure requirements, provide greater access to financial advice for lower- and middle-income savers, and help small business owners provide retirement plans for their employees.
A similar bill, the Affordable Retirement Advice Protection Act, was introduced in the Senate by Sen. Johnny Isakson (R-GA).
The bill would overturn the Department of Labor’s fiduciary rule, which expands the definition of “investment advice fiduciary” and requires financial advisers to serve in the best interests of their clients in retirement accounts.
“Our nation faces difficult challenges when it comes to retirement security, and the American people deserve real solutions,” Roe said. “That is why, for years, we’ve been working to stop a flawed fiduciary rule that would make it harder for low- and middle-income families to save for retirement. The Obama administration made a reckless, unnecessary trade-off between strong protections for retirement savers and access to affordable retirement advice. This legislation reflects a more responsible solution that will ensure all Americans have access to affordable retirement advice that’s in their best interest.”
Roskam said the bill will help Americans at every income level save for retirement.
“It protects access to quality, affordable financial advice and creates more choices so families in Chicagoland and across the country can find the tools that help them plan for their futures,” Roskam said. “This bill encourages more people to save and helps ensure advisors always serve the best interests of their clients. I’m proud to lead this effort with Dr. Roe and look forward to advancing this commonsense legislation.”
The American Council of Life Insurers (ACLI) supports the bills.
“ACLI supports reasonable and appropriately tailored rules that require all sales professionals to act in the best interest of their customers. The Affordable Retirement Advice for Savers Act and the Affordable Retirement Advice Protection Act represent positive steps in contrast to the Department of Labor’s fiduciary regulation,” ACLI officials said.
ACLI said the DOL rule limits retirement savers’ access to education and information about retirement solutions, including annuities.
“ACLI is encouraging collaboration between the Labor Department, the Securities and Exchange Commission, the states and Congress to develop comprehensive public policy solutions that help Americans meet their financial and retirement security goals.”