The new fiduciary rule being considered by the U.S. Department of Labor has the support of one influential financial organization, but the opposition of a second.

A series of hearings are being held by DOL in Washington, D.C., this week on updating the fiduciary definition for retirement investors that is part of the 40-year-old Employee Retirement Income Security Act, or Erisa. The proposed rule would require advisors to retirement plans to put the clients' interests first.

The old standard, which does not require clients' interests to be the first consideration, is outdated and needs to be amended now, according to testimony given Monday by representatives of the Financial Planning Coalition, which is comprised of the Certified Financial Planner Board of Standards Inc., the Financial Planning Association and the National Association of Personal Financial Advisors.

At the same time, the Financial Services Roundtable (FSR) says the new rule is too complicated and will limit investors’ access to financial advice. The FSR represents large financial services companies that provide banking, insurance and investment products and services.

The coalition strongly supports the new rule as being urgently needed and beneficial to consumers, said Marilyn Mohrman-Gillis, CFP Board managing director of public policy and communications, and Ray Ferrara, former chair of the CFP Board of Directors.

“Retirement investors face a perfect storm in today’s financial services marketplace," Mohrman-Gillis said. "With ever-increasing responsibility for their own retirements and the need to choose from an increasingly complex set of financial products and services, retirement investors more than ever need competent financial advice that is in their best interest. Yet the current regulatory framework allows advisors’ interests to be misaligned with the interests of retirement investors resulting in the loss of billions of dollars in savings.”

The coalition’s testimony also reflected its experience in establishing a fiduciary standard for CFP professionals in 2007. At that time, firms and industry organizations made arguments similar to those being made today regarding the DOL rule. Opponents claimed the CFP Board’s fiduciary requirement was unworkable with their business models and that CFP professionals would be forced to rescind their certification if required to operate under a fiduciary standard, the coalition said.

“Contrary to those predictions, the number of CFP professionals has grown by more than 30 percent to over 72,000 since CFP Board established a fiduciary standard," Mohrman-Gillis said. "And many firms, to their credit, are recognizing the value of competent and ethical advice and are supporting CFP certification for their advisors.”

Ferrara echoed that sentiment. “Many in the industry say the re-proposed rule is unworkable, too costly and will force advisors to abandon middle-class clients," he said. "Based on our firm’s actual experience, we don’t share these views. The argument that this rule will diminish the availability of services to middle-class Americans is simply not credible. ProVise [Management Group LLC, Ferrara’s firm] has successfully served middle-class clients under a fiduciary standard for years. The re-proposed rule still allows us, and everyone else, to provide advice using a commission or fee model.”

On the other hand, the FSR warned DOL that implementation of the fiduciary proposal will harm Americans’ ability to adequately save for retirement, limit access to financial advice and guidance for lower and moderate-income Americans, and overwhelm retirement savers with mountains of disclosure and red tape.

Among other things, according to the FSR, the DOL proposal would limit retirement investment products commonly available today and require customers to sign a contract with a financial professional before even general conversations regarding retirement goals could take place.

“The proposal is extremely complicated and impractical, and would adversely impact retirement savings, particularly for lower- and moderate-income Americans,” said FSR vice president and senior regulatory counsel Felicia Smith. “Let’s fully enforce existing laws to remove ‘bad actors’ from the industry and further ensure all customers receive investment advice that is in their best interests.”