Some industry groups, including the Securities Industry and Financial Markets Association (SIFMA) and the Financial Services Institute, believe the Securities and Exchange Commission is the appropriate entity to come up with an alternative to the Department of Labor’s fiduciary rule. Yet, the Insured Retirement Institute—the trade association for the retirement income industry—believes Congress should be the one to replace the DOL rule.
In its 2017 advocacy blueprint released Monday, the group called on Congress to introduce legislation that would establish a consistent best interest standard of care, “which will preserve access to advice and products that consumers need to achieve secure retirement,” said Lee Covington, senior vice president and general counsel.
“Now that we’ve released our blueprint, we’ll obviously be talking to members of Congress about advancing legislation that would accomplish those goals.”
The DOL is currently gearing up to delay the implementation of its fiduciary rule. On Feb. 3, President Donald Trump ordered the DOL to undertake an economic and legal review of the pending fiduciary rule.
Paul Richman, IRI’s vice president of government affairs, said a delay could cause some on Capitol Hill to look at legislative action, akin to some of the bills that came out before the DOL rule was finalized. That includes bills introduced by Rep. Peter Roskam, R-Ill., and Phil Roe, R-Tenn., which proposed a new client best interest standard for the entire financial services industry, both registered investment advisors and brokers. Sen. Johnny Isakson, R-Ga., introduced similar legislation in the Senate.
Individuals who plan for retirement with the help of a financial professional have better savings habits and sounder planning behaviors. They also save twice as much over a seven to 14-year period.
“The rule makes sweeping changes to the existing regulatory framework that will ultimately make it harder for savers to plan for retirement, and it will deprive them access to affordable, holistic financial advice as well as a wide range of investment options,” Covington said.
Last Friday, the IRI, along with eight other plaintiffs, appealed a U.S. federal court judge’s decision to uphold the DOL fiduciary rule.
“Given our viewpoint regarding the rule, we want to pursue both the legal resolution and of course we’ll participate in any rereview by the DOL as well,” Covington said.