In an open letter sent to Thomas Perez, Secretary of Labor, 30 members of the House express concerns about a scheduled update of the DOL’s fiduciary standards. In its 2014 regulatory agenda, the DOL’s Employee Benefits Security Administration (EBSA) says the new proposed definition of fiduciary—or as the EBSA now calls it, the conflict-of-interest rule—is due out in August.
The Securities and Exchange Commission (SEC) is also considering whether or not to propose a fiduciary requirement for registered representatives. Both organizations have reported concerns that the emergence of new technologies and business models may lead to conflicts of interest that have previously been overlooked.
Late last year, Perez said the DOL would delay any proposed fiduciary rule until August so that regulators could continue to listen to and address concerns of Congress and the financial services industry.
In the letter, members ask Perez to coordinate with other regulators “to ensure that all regulatory efforts with respect to fiduciary standards work together in a way that serves retirement savers effectively.”
“We certainly want to protect plan participants, IRA [individual retirement account] owners and plan sponsors from unfair and deceptive practices,” the members say. “But this should be done in a way that does not restrict access to critical investment assistance.”
In its letter, the New Democrat Coalition says it is especially concerned about the way expanded fiduciary rules could impact low- and middle-income individuals—as well as small businesses—who may lose access to cheaper, non-fiduciary forms of financial advice under the new rules.
On its website, the New Democrat Coalition identifies itself as the “pro-growth, fiscally-responsible wing of the Democratic Party.” Not all members of the New Democrat Coalition signed the letter.
A full copy of the letter, including a list of the undersigned lawmakers, can be viewed here.