A bill expected to be passed today by the House that would restrict the ability of the Labor Department and the Securities and Exchange Commission from imposing a fiduciary obligation on advisors to pension plans is thought to have no chance of becoming law.

Rather than an emphatic effort to change the direction of federal policy, the House action is seen as just another lukewarm, destined-to-fail attempt by Republicans to chip away at the Dodd-Frank Act.

Since coming under Republican control following the first Congressional election after the passage of Dodd-Frank three years ago, the House has passed bills numbering in the tens to the twenties chipping away at Dodd-Frank, said Rick Maurano, a key aide to former Congressman Barney Frank in pushing through the original law.

Uniformly, these House-passed bills to chip away at Dodd-Frank have not received Senate hearings or Senate floor votes.

Maurano is an executive with Better Markets, a lobbying group dedicated to preventing the weakening of Dodd-Frank through Congressional and regulatory agency action.

Better Markets is opposing the bill as are the Investment Adviser Association, the CFP Board, the Financial Planning Association and the National Association of Personal Financial Advisors, which sent a letter to Republican and Democratic House Leadership in late September claiming the legislation would leave investors with significantly less protection.

The Consumer Federation of America and the North American Securities Administrators Association also signed on to the correspondence.

On Tuesday before the House vote, The Financial Services Institute released the following statement: “Working to ensure that the Department of Labor’s rule proposal doesn’t limit access to quality, affordable advice for middle-class Americans is our top priority. This bill sends yet another message to the Department that many in Congress are concerned about their rule’s impact on retirement advice for small investors.”

The bill would bar the Labor Department from coming out with a fiduciary standard for advisors, broker-dealers and other pension fund professionals until 60 days after the Securities and Exchange Commission did.

The legislation would also prohibit the SEC from coming out with its own rule until it had certified a fiduciary standard would not limit the personal investment advice retail customers could obtain and provide proof a rule would  reduce retail customer confusion over standards of conduct for to brokers, dealers, and investment advisors.

President Obama has said he would veto the bill if it comes to his desk.
 

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