The U.S. Department of Labor needs to create a tougher fiduciary regulation to protect investors regardless of what the Securities and Exchange Commission does, executives from the CFP Board and other investor advocate groups told House Financial Services and Labor Committee staffers earlier this week in an online briefing.

Executives from the AARP, the CFP Board, Better Markets and the Public Investors Advocate Bar briefed Congressional staff on the effectiveness of the current DOL rulethat went into effect last February and is just now being enforced by the agency, and whether the new or amended rule the agency promised last spring should be tougher. All four groups said a tougher standard is needed.

“Clearly, people investing their hard-earned savings for a financially secure retirement deserve to know that the financial professional advising them is working solely in their interest. We call on the Department Labor to issue proposed rules designed to update and modernize requirements that reflect the reality of today’s marketplace,” CFP Board Chairwoman Kamila Elliott told congressional staffers, according to written remarks obtained by Financial Advisor.

Retirement investment advice must be in the “sole interest” of the plan and plan participants, which is not the case today, Elliot said.

“The current five-part test that determines whether a financial professional meets the definition of fiduciary is woefully outdated. It was adopted in 1975 when IRAs had just been created and 401(k)s didn’t even exist. So, it isn’t necessarily a matter of adding to the DOL rules, it is about updating and modernizing them to reflect a world when most Americans are personally responsible for managing their own retirement savings,” she said.

Elliott said that no matter how “proud” she was that the CFP Board required CFP professionals to commit to a fiduciary standard, “we recognize the limitations of a professional standard setting body. As such, CFP Board has long advocated for a federal fiduciary standard for all investment advice.”

The DOL was not asked to speak at the meeting, according to one Congressional source, and did not respond to a request for comment.

Representatives of the securities industry were also not asked to speak, but Sifma President Kenneth Bentsen Jr. distributed a statement to congressional staffers the morning of the briefing entitled, “Congress Spoke and the SEC Acted: Now Is Not the Time to Rewrite Rules and Upend the Retail Investor Market.”

Bentsen said that “efforts to reprise the DOL fiduciary rule would conflict with Reg BI’s robust investor protection, likely restricting access to advice, raising costs to investors and limiting their choice to select the service they want to buy.”

The CEO of Sifma, which represents the interests of the securities industry and Wall Street, also argued that the securities marketplace is already highly regulated and was “enhanced most recently by the SEC’s Regulation Best Interest in response to the Dodd-Frank Act, which imposes stringent mandates on brokers to disclose, mitigate and eliminate conflicts related to the provision of advice.”

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