Today we discuss an important issue that has been simmering for the past five years. After the Department of
Labor retracted the first version of this rule several years ago, they have been working to listen to a broad
spectrum of stakeholders on how to proceed.
I believe that everyone in the room, on every side of this issue, believes in a "Best-Interest or Fiduciary
Standard" because the client's interest should be paramount. What this comes down to is how to make it
happen, and how to implement this rule in a way that makes sense.
I truly believe that today most advisors do what is in the best interest of their clients, and the final rule needs to not have an overwhelming burden on those good actors. However, providing a standard that those few bad
actors need to abide by is absolutely essential.
As we all know, today, most Americans are not saving enough for retirement. It is essential that what little is
being invested must not be biased by conflicted advice. Investors must be able to trust the person advising them about the money they need to live after retirement. On the other side of the coin we must protect individuals and small businesses access to advice. Because mistakes in investments cost billions of dollars.
I am thankful to all of our witnesses for coming today in order to share their expertise. We are all interested in
learning why this is necessary and how this will impact advisors; but more importantly how it impacts the
advice individuals receive.
I am especially glad The Secretary of Labor has joined us. I know he is glad to be hearing feedback about the
rule, and I am especially pleased that he decided to extend the comment period by an additional 15 days.
I know that he has been working diligently on an overall goal of "expansion of retirement savings" as a way to
address the retirement crisis. They have been doing a great deal of work on financial literacy, they have
increased effective enforcement by the Employee Benefits Security Administration and technical assistance that has been provided to employers, workers and retirees. A good workable rule regarding a best-interest standard will increase trust between a client and their advisor, and I know we all agree that is necessary part of expanding retirement savings.
I don't think the Secretary or anyone on his staff would say this rule is perfect, but that is why having this
conversation and having a comment period is so vital.
I will be asking some very in-depth questions now and also for the record, because although I believe this
process needs to continue forward to close a loophole and establish a fiduciary standard that reflects the
retirement landscape as it looks today, we need to understand and fix any unintended consequences, especially for low and middle-income investors and small businesses.
Ensuring that people are receiving good, affordable, conflict-free advice should be, and I believe is the end-goal for everyone.
I look forward to hearing in-depth answers so that we can reach an end-result rule that helps those most in need.