Ahead of the Department of Labor’s anticipated proposal to redefine fiduciary responsibility, expected sometime in 2012, 55 House Republicans sent a letter asking for more careful consideration of the effects on consumer choice before any new rule is proposed.
The letter expresses the representatives’ “appreciation” for the Labor Department’s decision in September to withdraw the proposal, and says that any new rule proposed must “avoid costly new regulations that may reduce choice among qualified service providers and investment products.”
The letter follows a November letter sent by 30 House Democrats that expressed similar concerns. In that letter, the Democrats wrote that, had the previous rule been finalized, “millions of Americans would have been left without the ability to receive adequate investment education and assistance in planning for retirement. Furthermore, the proposal would have been harmful for the many small businesses that need help in providing retirement benefits for their employees.”
The Department of Labor withdrew the previous rule after many in the financial services industry reacted to it by saying that it would make getting even the simplest IRA advice prohibitively expensive for American workers.
The Financial Services Institute has always wanted and expected the Labor Department to withdraw the rule and re-propose it, FSI President and CEO Dale Brown said in a statement after the House Republicans sent their letter. FSI has “urged” the Labor Department “to come back with a more appropriate rule based off a sound economic impact study and a true picture of the problem they’re trying to solve.”