Rule Limits Investors’ Access to Financial Advice, Choice
WASHINGTON, D.C.— The U.S. Chamber of Commerce expressed concern with the Department of Labor’s (DOL) re-proposal of the definition of fiduciary regulation released today. Since the issuance of the original proposal in 2010, the Chamber has been committed to working for a rule that balances the need to protect participants with the free flow of information and services in the market.
“The business community is committed to improving our nation’s retirement system,” said David Hirschmann, president and CEO of the Chamber’s Center for Capital Markets Competitiveness. “We are concerned that this rule will ultimately limit investors’ ability to seek financial planning services while also restricting access and choice. Investors want and need advice, and if this rule makes it harder for them to seek guidance then that is a problem.”
“Well disclosed choices empower investors to choose how they get financial advice, and ensures they have necessary access to affordable financial services and resources when planning for retirement,” said Randy Johnson, senior vice president of Labor, Immigration, and Employee Benefits for the Chamber. “We will take time to review this rule in detail but we have a number of initial concerns that we hope will be addressed in this regulatory process. Stretching out over hundreds of pages, we anticipate that the rule will bring complexity and will require significant review and processing by many experts.”
The Chamber submitted comments on the original proposal noting a number of areas of concern, and also sent a letter to former Labor Secretary Solis requesting a re-proposal of the proposed regulation based on the lack of sufficient economic analysis.
“Rushing this rule through the OMB review process prevents a thorough analysis that takes into consideration all concerns that have been expressed,” Hirschmann stated. “For example, it risks potential conflicts with regulations under the Investment Advisor Act and the Securities and Exchange Act, while unnecessarily duplicating regulatory oversight for broker-dealers.”
“The real goal needs to be a rule that puts investors first and ensures they have both the appropriate safeguards and freedom of choice in how to save for retirement, and we will continue to oppose any rule that does not support this objective,” Johnson concluded.
Recently, the Chamber presented a forum on fiduciary standards, and released a paper entitled, “Using PTEs to Define an ERISA Fiduciary: Threading the Needle with a Piece of Rope” to explain the difficulties of using the PTE process to narrow an overly-broad rule.
Since its inception in 2007, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems that have governed our capital markets. The CCMC is committed to working aggressively with the administration, Congress, and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.