GOP Lawmaker Submits Bill to Kill DOL’s Rule
Rep. Ann Wagner, R-Mo., has submitted a bill that would replace the Department of Labor’s fiduciary rule with a best interest standard applicable to brokers offering retail investment advice, InvestmentNews writes.
Wagner’s bill would permit advisors to accept third-party payments, charge commissions, push proprietary products and limit the types of investments offered, according to the publication. It also would not hold brokers to recommending the least expensive product or strategy, InvestmentNews writes. In addition, brokers would be required to make recommendations reflecting “reasonable diligence, care, skill and prudence,” according to the legislative text cited by the publication. Wagner’s bill also exempts annuities sales if they’re done under a similar standard as the rest of the bill, InvestmentNews writes.
The DOL’s fiduciary rule, which only applies to retirement account advisors and went into partial effect last month, purports to force brokers to put clients’ interests first and disclose conflicts of interest.
Wagner’s bill, meanwhile, would require brokers offering retail investment advice to “avoid, disclose or otherwise reasonably manage any material conflict of interest,” according to InvestmentNews.
The House Financial Services Subcommitteeis scheduled to discuss Wagner’s bill Thursday as part of a hearing on “unintended consequences” of the Labor Department’s fiduciary rule and the possibility of the SEC taking the lead on a best-interest standard, according to a committee memo cited by the publication.
The DOL is currently reviewing the rule as directed by a February memorandum from president Donald Trump. Government lawyers speaking on behalf of the agency have already said they want to take out the rule’s provision banning class-action waivers. The DOL’s request for public comment on the rule, issued earlier this month, in part addresses the possibility of delaying the rule’s full implementation scheduled for January 1.