The US Chamber of Commerce said on Monday that if it finds that the proposed rule on financial advisers meant to protect retirees is unworkable, the department will sue the federal government.
Reuters reported that the rule would create a "fiduciary standard", which means that advisers who give retirement advice must always act in the best interest of their clients. The aim is to stop retirees from spending and buying unnecessary products that line their broker's personal bank accounts through fees and commissions.
Insurance and financial agencies have warned the proposal, which could drive up costs and would keep them from offering retirement services such as annuities to lower-income and middle-income people, reports Think Advisor. David Hirschmann, president and CEO of the Chamber Center for Capital Markets Competitiveness, said the US Chamber of Commerce may seek a legislative remedy if the final rule to amend the definition of fiduciary on retirement account fails to fix the significant concerns. In a call with reporters, Hirschmann thinks that Commerce's Center has to "at least" consider the need to go to court.
"We're certainly prepared to do that if the changes aren't made, but we won't make a final decision until the ink is dry," Hirschmann added.
Meanwhile, Tom Donohue, Chamber president, said last month they will sue the Department of Labor or other congressional committees to block the rule if it is inappropriate for small businesses. Although at that time, he admitted he had not yet read the rule, says Financial Advisor.
In January, the DOL sent a revised proposal for an adviser rule to the Office of Management and Budget in the White House. Reports say that details will not be made public until the department finishes its review, which is expected this month.
The Chambers wants to apply several changes in the new version of the proposal, which includes how and when clients and advisers should sign contracts.
