Republican and Democratic lawmakers introduced today legislative proposals that will ensure retirement advisors serve their clients' best interests and preserve access to quality financial planning. The proposals reflect a set of bipartisan principles members introduced in response to a Department of Labor regulatory proposal that many fear will reduce access to financial advice for low- and middle-income families. The bills represent a legislative compromise that will protect consumers and keep high-quality financial advice affordable for all Americans.
Upon introducing the legislative proposals, Reps. Peter Roskam (R-IL), Richard Neal (D-MA), Phil Roe (R-TN), and John Larson (D-CT), issued the following joint statement:
We're proud to strengthen and protect retirement planning tools for working families by raising investment advice standards throughout the industry. These bipartisan proposals require advisors to serve their clients' best interests, strengthen protections for retirement savers, and maintain access to quality financial advice for small businesses and low- and middle-income Americans.
Known as the "fiduciary rule," the Department of Labor's regulatory proposal will impose on financial advisors new mandates and regulatory requirements. Bipartisan concerns have been raised that the proposal could cause individuals to lose access to trusted financial advisors, raise the cost of receiving financial advice, and lead to fewer small businesses offering retirement plans. In response, Republican and Democratic lawmakers introduced a set of principles to form the basis for a legislative solution that will strengthen retirement security without harming working families and small businesses.
Those principles are reflected in the legislative proposals being introduced today. The Strengthening Access to Valuable Education and Retirement Support (SAVERS) Act, led by Rep. Roskam, and the Affordable Retirement Advice Protection (The ARAP) Act, led by Rep. Roe, would require an affirmative vote by Congress before any final rule by the Department of Labor goes into effect. If Congress fails to approve the department's regulatory proposal, a new fiduciary standard would take effect that:
Raises the bar for the entire financial services industry by requiring advisors to serve in their clients' best interests;
Roots out bad actors by penalizing financial professionals who violate the trust of their clients;
Requires advisors to clearly communicate key information to ensure investors are well-informed to make investment choices; and
Ensures that individuals and families saving for retirement have access to advice and investment options to meet their individual needs and circumstances.
By amending the Internal Revenue Code of 1986 (The SAVERS Act) and the Employee Retirement Income Security Act of 1974 (ARAP Act), the proposals together will raise investment advice standards for the retirement industry to ensure financial advisers act in the best interests of their clients, while also ensuring low- and middle-income Americans have access to quality, affordable financial advice to help plan for retirement.