The battle over the DOL’s efforts to implement a new law that will impose a fiduciary standard on anyone giving retirement advice continues with some now questioning whether critics of the law really believe its effects will be so grave. The financial industry has hotly contested the new law based on concerns that it will drive up costs and limit their ability to offer certain retirement services to lower- and middle-class individuals.
But on Thursday, February 11, a letter from two influential lawmakers surfaced, in which they state that financial and insurance companies are not as critical of the law when speaking to shareholders. Senator Elizabeth Warren and Representative Elijah Cummings said that financial and insurance companies are “providing their investors with a much more sanguine view of the impact of the rule,” and urged the White House and Labor Department to finalize the rule quickly.
Industry leaders highlighted in the letter responded that their positions on the issue were very consistent with their public critiques of the law as not in their customers’ best interest. Some cited their diversified business mix and strategy and others their ability to adapt to a changing market for their assurance that they could withstand the regulatory change and maintain a positive outlook for investors.
The DOL began working to revise the fiduciary standard, in response to the Dodd-Frank Wall Street reform law, shortly after it was enacted in 2010. Regulators have not yet been able to turn it into an enforceable rule.
Nevertheless, companies faced with adapting to the new law – whatever it will be – need to be aware of changes to the law as they are developing and offer comment when possible, and to start thinking ahead about how to cope with the upcoming changes. Because this change is coming sooner or later, it is best to be ready when it gets here.