WASHINGTON – Democratic members of Congress from Ohio on Thursday urged the Trump administration to refrain from scrapping a new labor department rule that requires retirement advisors to put client interests ahead of their own.
Trump signed an executive order on Feb. 3 that required the labor department to review the new rule that’s set to go into effect in April.
Advocates say the rule is needed to keep investment advisors from steering clients into products that don’t suit them but will generate big sales commissions. Critics say it will drive up investment costs and make some firms stop providing free investment advice because of litigation fears.
Washington Republicans want to kill conflict-of-interest rule, say it will harm retirement savers
U.S. Sen. Sherrod Brown, Rep. Tim Ryan of Niles, and Rep. Marcy Kaptur of Toledo charged that Trump’s action could diminish the retirement security of countless small investors, and accused him of failing to make good on his campaign promises to stick up for the little guy and protect middle class economic interests.
“This issue isn’t getting the attention from people across the country that we think it should be getting,” said Ryan. “We are trying to raise the level of awareness and stoke interest in why this is a bad idea.”
Micah Hauptman of the Consumer Federation of America said the Department of Labor will have to accept public comments on the rule before deciding whether to alter or delay it. If no changes are made, the rule will go into effect on April 10.
What Trump’s plan to kill the #fiduciaryrule means for individual investors & their retirement savings: https://t.co/R3PRf3G0vM pic.twitter.com/pGjq3iGzNG
— Steven Rattner (@SteveRattner) February 6, 2017
A coalition of national business organizations including the U.S. Chamber of Commerce which sued to overturn the 1,023-page rule, said it would make “sweeping changes to existing regulations that will make saving for retirement more difficult for the very same hardworking American families and individuals it claims to protect.”
“The rule will shackle Main Street financial advisors with extensive new requirements and constant liability, forcing them to limit the options and guidance they provide to retirement savers,” said a statement from the coalition.
President Trump’s action to delay the #fiduciary rule is a wise one. It’s Obamacare for financial planning. https://t.co/IHaPPe30Si
— Paul Ryan (@SpeakerRyan) February 3, 2017
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