Senate panel Republicans told that staffers of U.S. Securities and Exchange Commission and the U.S. Labor Department were still in a controversial plan to regulate the impending conflicts of interest among brokers who give retirement advice.
The debate ignited on the proposal of the Labor Department regarding the plan. Under such, it requires brokers to uphold the best interest of their clients when giving advice about Individual Retirement Accounts (IRA).
The arguments were grounded on the earlier caveat of the experts that the rule will not only overkill but it will also drive up the price of investment advice, ultimately decreasing investment guidance for low- and middle-income investors.
"The Labor Department's rule threatens to harm low- and middle-income Americans by increasing the cost of investment advice," U.S. Sen. Ron Johnson, chairman of the Senate Homeland Security and Governmental Affairs Committee, said in a statement.
Johnson's committee released, "The Labor Department's Fiduciary Rule: How a Flawed Process Could Hurt Retirement Savers," detailing the Labor Department's "flawed process in handing down its fiduciary rule."
But the Department, which regulates retirement plan advice, rejected numerous recommendations from the SEC and other agencies.
Michael Trupo, the Department's spokesperson told that they were coordinating closely with the SEC staff.
"The panel's report mischaracterized documents which show that Labor's engagement with the SEC was comprehensive, and that the SEC's input was incorporated into the plan," Trupo said.
The Labor Department's plan has been in play for more than five years. The White House's Office of Management and Budget said it had received the department's final proposed rule.
Some Democrats and Republicans opposed the plan. They contended that it would drive up customers' costs commissions. The Securities Industry and Financial Association has called for the OMB to weigh the rule's potential costs and benefits.
Meanwhile, House Speaker Paul Ryan posted online that up to 7 million IRAS would not allowed for advice under the rule. He was determined to do everything possible to protect consumers and bar such rule.
In his blog, Ryan added that it is a supposed attempt to prevent 'conflicts of interest' in financial advice. Thus, it will create more paperwork and record-keeping requirements for planners, which only means there are higher costs for consumers.
