Rep. Ann Wagner Tells NAIFA: Congress Needs to Hear From You on DOL Proposal

Rep. Ann Wagner (R-Mo.) told attendees at NAIFA's Congressional Conference yesterday that they need to be tough when they talk to legislators and educate them about the damage the Department of Labor’s proposed “best interest” rule could do to advisors and their middle- and lower-income clients.
 
The proposed rule would redefine a retirement investment advice fiduciary under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code. NAIFA believes that as a result, many NAIFA members who have operated effectively on behalf of clients under a suitability standard would now be considered fiduciaries and subject to fiduciary-specific restrictions and liabilities under ERISA and the tax code.
 
NAIFA also believes the proposal would reduce the availability of services and advice as some advisors would either shift their practices away from the retirement sector or would drop middle- and lower-market clients who would not be able to afford increased costs. Consumers may find themselves unable to continue working with advisors they know and trust and may be unable to receive advice in a number of common, yet complicated, retirement-investment situations.
 
The DOL proposal ranks high on the agenda of NAIFA’s 800 Congressional Conference attendees as they meet today with their representatives and senators on Capitol Hill.
 
“They need to hear from you,” Wagner said during yesterday’s training and education session. “They need to hear how this will impact the investors back home in their districts.”
 
“I worry about small investors because I was one of them,” she said. “Small investors rely on advisors for discipline and to ensure they understand how to prepare for retirement.”
 
“I don’t know where they will go when they are priced out of the market,” she added.
 
Wagner has introduced legislation that would force DOL to refrain from implementing its best interest rule until after the Securities and Exchange Commission has decided whether to propose a fiduciary rule dealing with retail investment advice.
 
“This is not the purview of the Department of Labor, it’s an overreach,” Wagner said. “The Securities and Exchange Commission, if anyone, should move on this. And the SEC should only do so if they have shown investor harm. I don’t believe they have. There may be a little investor confusion, but we can take care of that with disclosures. Don’t hit this thing with a sledgehammer.”
 
Wagner called on regulators to “work with industry and Congress on a solution that will not devastate an industry and not harm investors.”
 
NAIFA continues to engage DOL in an effort to encourage changes to the proposed rule that would make it workable for advisors and consumers. NAIFA members and staff are also speaking with members of Congress about potential legislative solutions.
  • Posted May 20, 2015 IN
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Comments
Jordan
Good explanation for what's going on in Congress right now. It's important that we get involved in legislation like this - it can affect way more than it seems at first glance. Thanks so much for sharing!
5/29/2015 12:59:53 PM