Today, Congressman Peter Roskam (IL-06) hailed passage of H.R 2374, the "Retail Investor Protection Act," which passed the House today on a bipartisan vote. The legislation would protect low and moderate income Americans and ensure continued access to competent, affordable financial and investment advice by preventing two different federal agencies--the Securities and Exchange Commission (SEC) and Department of Labor (DOL)--from pursuing a harmful regulatory strategy regulations on financial advisors. Specifically, proposed regulation would drive up the cost of working with a financial advisor, putting sound financial advice out of the reach of many Americans.
"Here you have over-zealous government regulators creating a whipsaw of regulations that hurt middle class Americans' ability to make smart choices while saving for their first home, their kid's education or for retirement," said Roskam. "With a stagnant economy, now more than ever, families need the ability to make smart financial decisions, and limiting access to financial advisors is the wrong move. I am glad the House of Representatives acted today to ensure middle class Americans have access to sound financial advice."
"I applaud the efforts of the House for their willingness to recognize the needs of the smaller and middle income investor," said John W. Wheeler, Jr. President of Illinois National Association of Insurance and Financial Advisors. "With the requirement of advisory fees, providing advice and help to many Americans would become impractical. Studies show that virtually all IRA accounts under $25,000 are serviced using a brokerage account. More confusion is not what is needed to encourage Americans to do a better job of saving for their futures. The middle market needs more help, not less."
To avoid contradictory action between the agencies, H.R. 2374 would require the SEC, the agency typically tasked with financial regulation, with first proposing the new regulation on broker dealers and investment advisors before any DOL action. Additionally, the SEC would have to show whether investors are being harmed under the current standards of conduct and also show that their proposed rule would not prevent investors from gaining advice and services. The proposed rules have drawn concern from both Republicans and Democrats, with over 100 Members of Congress expressing concern over the potential costs of the regulations, as well as the lack of coordination between both agencies.