Wagner Delivers Opening Remarks at Hearing to Examine the DOL Fiduciary Rule and its Implications for Americans Saving for Retirement
Washington,
January 10, 2024 -
Today, the House Financial Services Subcommittee on Capital Markets, led by Chairman Ann Wagner (MO-02), is holding a hearing entitled “Examining the DOL Fiduciary Rule: Implications for Retirement Savings and Access.”
Watch Chairman Wagner’s opening remarks here.
Read Chairman Wagner’s opening remarks as prepared for delivery:
“Thank you all for joining us today for this very important hearing, which addresses a crucial issue affecting the accessibility of affordable and dependable retirement investment advice for millions of low- and middle-income Americans.
“America is facing a retirement savings crisis. A 2023 Federal Reserve report highlighted that nearly 28 percent of working adults have zero retirement savings. Washington needs to empower individuals to save for retirement, not make it more difficult.
“Sadly, the Department of Labor’s latest proposed fiduciary rule will do just that. Disguised as an attempt to eliminate so called ‘junk fees,’ the Biden Administration’s proposal would push retail investors out of transaction-based investment accounts into fee-based investment accounts. Millions of Americans prefer the low costs of transaction-based accounts because they want one-time, affordable, high quality financial advice.
“Should this proposal be finalized, it would leave millions of Americans who are just starting their retirement savings journey without access to sound financial advice–resulting in higher costs, fewer choices, and reduced service.
“This proposal is the DOL’s fourth attempt since 2010 at disrupting the client-advisor relationship. DOL was forced to withdraw their first proposal after receiving a flood of opposition from retirement savers and broker dealers. Then they lost in court–twice–when they tried to revive this harmful proposal.
“I’ve been pushing back against this misguided effort since I first came to Congress in 2013, and I am in utter disbelief that we’re still having this fight.
“This latest proposal is yet another bite at the same rotten apple. It should be withdrawn immediately.
“Financial professionals are sounding the alarm about increased compliance burdens, limitations in product offerings, and restricted access for consumers. Should this proposal be enacted, many would have no other option but to increase or impose minimum asset thresholds for clients, closing the door on financial advice for many.
“As we saw when the 2016 rule went into effect, this proposal will shut millions of low and middle-income Americans out of the financial advice market, and we would be left with two classes of investors: those who can afford investment advice, and those who cannot.
“Moreover, the DOL proposal is a solution in search of a problem. Existing federal and state regulations, like the SEC’s Regulation Best Interest (Reg BI) and the National Association of Insurance Commissioners’ best interest standard for annuity sales have been established to safeguard consumers seeking financial advice.
“These regulations, coupled with ERISA’s existing five-part test, fully protect consumers seeking retirement products and financial advice.
“I’d like to enter into the record a letter sent to the DOL regarding the 2016 fiduciary rule.
“This letter was signed by 93 House Democrats, including the Subcommittee’s Ranking Member and many other Members sitting on this Subcommittee today.
“In this letter, the signers state that ‘In order to have a successfully implemented rule, it is vital that the proposal doesn't limit consumer choice and access to advice, have a disproportionate impact on lower- or middle-income communities, or raise the costs of saving for retirement.’
“The letter also expressed the signers’ recommendation that the proposed rule address annuities and not disadvantage lifetime income options.
“I wholly agree with these demands made by my colleagues and would hope that since this new DOL proposal does not meet their demands, they will join me in opposing the proposal.
“I look forward to hearing from our expert witnesses who will explain further the damage this proposal will have on retirement security in America.”
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