Hill Dems Increasingly Skeptical About Fiduciary Rule

Skepticism about the Department of Labor’s (DOL) proposed fiduciary rule is mounting — and not just from President Obama’s opposition. Concerned about consumer choice and access to advice, as well as the possible effect of the rule on the cost of saving for retirement and on the poor and middle class, members of his own party on the Hill are increasingly expressing reservations.

More than one-third of the 188 Democrats in the House of Representatives have such concerns, according to The Hill. It reports that in a recent meeting with Labor Secretary Thomas Perez, Democrats argued that his department should make major changes to the proposal.

One of those House Democrats, Rep. Gwen Moore (D-Wisc.), by Sept. 21 had garnered more than 70 signatures from fellow party members in that chamber on a letter asking that the rule be improved.

In the letter, according to Insurance News Net, they tell the DOL that the rule:

• should allow specific investment examples in investor-education materials;

• should not restrict access to annuities;

• not limit consumer choice and access to advice;

• could raise the cost of saving for retirement; and

• could make the up‐front costs associated with setting up an annuity higher than those for other retirement options.

The representatives reportedly question the exemptions for compensation practices and investor education, as well as the DOL’s implementation plan for the rule. They also pointedly question the best interest contract (BIC) exemption, telling the DOL that it could accomplish what it seeks to through the BIC through a “less prescriptive and more principle-based approach to implementation.”

According to The Hill, there is some optimism that Perez is sincere when he says that the rule is not final, and a DOL spokesman said that the department will “examine public feedback” and did not estimate when the rule would be issued in final form.