House lawmakers plan to convene a hearing Thursday to discuss the impact of the Department of Labor's fiduciary rule on the capital markets. The hearing will focus on a draft bill put forth by Rep. Ann Wagner, R.-Mo., that seeks to kill the fiduciary rule and instead impose a best interest standard on broker-dealers' investment recommendations.
The Consumer Federation of America sent a letter Tuesday to members of the committee expressing “strong opposition” to the measure, stating that it “would dramatically weaken existing protections for retirement savers without providing meaningful new protections for investors in non-retirement accounts.”
Thursday's hearing will be held by the House Committee on Financial Services Subcommittee on Capital Markets, Securities and Investment.
Barbara Roper, the Consumer Federation's director of investor protection, along with Micah Hauptman, the group's financial services counsel, argued in the letter that Wagner's bill would repeal Labor's rule “just as it is beginning to deliver the best interest advice that retirement savers need and deserve.”
Since the rule was finalized more than a year ago, “firms have announced implementation plans that show that the rule is reducing the cost of advice, improving the quality of investment products, and preserving access to advice through both fee and commission accounts for even the smallest account holders,” Roper and Hauptman wrote.
“Indeed, since brokers and insurance agents are now required to provide fiduciary advice and not just self-interested sales recommendations dressed up as advice, retirement savers' access to genuine advice has been dramatically expanded as a result of the rule,” they explained.
What's “preventing retirement savers from receiving the full potential benefits of the rule is uncertainty over its ultimate fate as a result of the Trump administration's reconsideration of the rule,” Roper and Hauptman added.
On June 29, Labor published a request for information regarding its fiduciary rule, seeking feedback on 18 questions.
Jerome Lombard, president of Janney Montgomery Scott's Private Client Group, will testify on behalf of the Securities Industry and Financial Markets Association during the Thursday hearing before the Capital Markets Subcommittee. David Knoch, president of 1st Global, will be testifying on behalf of the Financial Services Institute.
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
