Business

Labor secretary: We’re moving ahead with financial advisor rule

by Kevin Cirilli - 08/11/15 8:07 PM ET

Labor Secretary Thomas Perez is moving ahead with issuing a final regulatory proposal for financial advisers despite growing concerns from moderate Democrats and Republicans that it would hurt low-income Americans.

{mosads}Perez responded to Rep. Ann Wagner (R-Mo.) in a letter earlier this week after she and other lawmakers called on Department of Labor (DOL) officials and the administration to re-propose the controversial so-called “fiduciary standards,” which would increase disclosure requirements for financial advisers.

The business community is vehemently lobbying against the proposal, which failed in 2010, arguing it would raise consumer costs for Americans who need financial advice the most. They also argue it would force Americans into receiving virtual financial advice as opposed to human financial advice.

But Perez and the administration argue the fiduciary rules are needed to better protect consumers from getting bad advice from their advisers, who could be benefitting off commission sales from financial institutions.

“We will move forward towards issuing a Final Rule that balances the input we have received,” Perez wrote to Wagner.

Congresswoman Wagner

Perez told Wagner that DOL officials “continue to welcome input on how to refine and streamline this proposal so that when we publish a Final Rule, we can all be sure it is reflective of relevant input and achieves its desired goals.”

DOL officials are having a hearing this week, which some in the business community have said is little more than political theater as DOL officials continue to aggressively move toward implementation.

But 12 moderate Democrats have criticized the proposal in the past week — a clear sign lawmakers could move to pass legislation that could prevent DOL officials from implementing the law.

Tags Thomas Perez