Signs emerged this week that the House Education and Workforce Committee will join the fiduciary fray and begin debating a bill called the “Affordable Retirement Advice for Savers Act.”
Introduced by Representative Phil Roe (R-Tennessee), in the eyes of its supporters the legislation would “protect access to affordable retirement advice by overturning the Obama administration’s fiduciary rule while ensuring retirement advisers serve their clients’ best interests.”
That probably reads like a paradox for supporters of the Department of Labor (DOL) reforms that were designed by former President Obama but left to his predecessor to fully implement. The stated goal of the DOL is to do essentially the same thing by taking the exact opposite approach—showing just how widely opinions diverge concerning the likely outcome of full implementation of the fiduciary rulemaking.
The news that the formal markup process would begin for the Affordable Retirement Advice For Savers Act comes after the full House has already passed the Financial CHOICE Act, a sweeping bill that would not just halt the fiduciary rule but also roll back many of the Dodd-Frank Wall Street reforms adopted by Democrats when they held significant majorities in the wake of the 2008-09 financial crisis.
According to a summary provided by Rep. Roe, the Affordable Retirement Advice for Savers Act would “overturn the flawed fiduciary rule while improving policies governing financial advice to enhance protections for retirement savers.” It would, he argues, “strengthen retirement planning by requiring financial advisers to serve their clients’ best interests … Enhance transparency and accountability through clear, simple, and relevant disclosure requirements … Ensure small business owners continue receiving the help they need to provide retirement plans for their employees … Protect access to high-quality, affordable retirement advice so more Americans can retire with dignity and financial security.”
Given the similarity between how the wider CHOICE Act and the new legislation would treat the fiduciary rule, it’s no surprise that the same providers are applauding the Affordable Retirement Advice for Savers Act. For example, the Insured Retirement Institute (IRI) released the following statement from President and CEO Cathy Weatherford in support of the bill.
“At a time when Americans are increasingly more responsible for ensuring financial security during their retirements, preserving access to affordable advice is critical. The Affordable Retirement Advice for Savers Act … will overturn the ill-advised Department of Labor fiduciary rule, protect access to high-quality, affordable retirement advice, require financial advisers to serve their client’s best interests, and enhance transparency and accountability through clear, simple, and relevant disclosure requirements,” Weatherford argues. “IRI has long supported the adoption of a workable best interest standard which will provide consumer protections and protect access to financial advice and the wide array of lifetime income products.”
Interesting to note, the Affordable Retirement Advice for Savers Act does not just seek to repeal the fiduciary rule. It also seeks to clarify what should and should not be considered fiduciary advice in the retirement planning context. Certainly the bill could evolve or fail outright, but if passed as currently written, it would return the retirement advisory marketplace essentially to where it was before the Obama administration took its significant regulatory actions. Also important to note, a different version of the bill has been introduced by Senator Johnny Isakson (R-Georgia), also pending debate.
Read the full text of the House version of the Affordable Retirement Advice for Savers Act here.