Thirty members of the Congressional New Democrat Coalition have asked Labor Secretary Thomas Perez to work with them in drafting a new definition of fiduciary that will affect federal regulations.
The coalition, in a letter sent to Perez Monday, said they have a “strong interest in establishing a dialogue with you” as the definition of fiduciary is debated. The Labor Department and the SEC are required by the 3-year-old Dodd Frank Act to create a uniform fiduciary standard for financial advisors and broker-dealers who give investment advice.
The Financial Services Institute is working with the coalition and expressed its gratitude for the efforts being made.
The definition of fiduciary will affect regulations under Erisa and some IRS codes regarding IRA plans and other financial matters.
A proposal for a new definition has been debated for months. Previously, concerns had been expressed by members of Congress about the coordination of the definition between the Department of Labor and the SEC.
The New Democrat Coalition, which was instrumental in passing the Dodd-Frank Act, had expressed concerns about one proposal made last year, which it said would have limited the amount of information that could have been given to investors, particularly those in retirement plans. That proposal was scrapped and a new proposal will be developed.
“We certainly want to protect plan participants, IRA owners and plan sponsors from unfair and deceptive practices,” the coalition said in its letter. “But this should be done in a way that does not restrict access to critical investment assistance.
“Second, we strongly believe that there needs to be coordination with other regulators to ensure that all regulatory efforts with respect to fiduciary standards work together in a way that serves retirement savers effectively.”
The coalition asked to be included in discussions on “how to best protect low and middle-income individuals and small businesses, while ensuring access to investment education, information, and affordable investment products and services.”