The House of Representatives approved yesterday a bill that would loosen regulations on fund companies so that they could provide advice to 401(k) participants. The bill, known as the Retirement Security Advice Act, was approved by a margin of 280-144.
The bill, widely supported by Republicans, attracted the support of 64 Democrats, according to supporters in the House. Rep. John Boehner (R-Ohio), who chairs the Committee on Education and the Workforce, where the legislation originated, introduced the bill earlier this year.
"The vast majority of American workers receive no guidance on how to best structure their retirement accounts and most cant afford to pay for it out of their pocket," Boehner said.
Opponents, including some retirement investing advice providers such as mPower and Invesmart, say the bill poses a potential conflict of interest because firms could steer clients toward investment vehicles with higher fees under the auspices of providing sound advice. Supporters say the bill includes requirements that companies disclose any conflict of interest and therefor such concerns are mitigated. Still, those who oppose the legislation plan to take their grievances to the Senate, which is expected to consider the matter in 2002.