President Trump is coming under fire from dozens of Democrats for the Labor Department’s plan to delay an Obama-era rule for financial advisers.
In a letter to the department sent Friday, a group of 40 House Democrats urged the Trump administration to move forward with the so-called fiduciary rule on schedule.
The fiduciary rule requires financial advisers to prioritize the needs of their clients over their own business opportunities, such as pushing higher-risk investment options that could generate more profit.
The Democrats say the fiduciary rule would ensure retirement savers receive “unbiased advice.”
“For far too long, certain unscrupulous financial advisers have been able to put their own financial interests and profit motives ahead of their retirement clients,” the Democrats wrote in the letter. “This insidious practice – known as providing conflicted advice – costs retirement plan participants an estimated $17 billion annually.”
But Republicans and business leaders criticize the rule, suggesting that it will raise the cost of retirement advice, which could force low-income workers out of the market. Even without the fiduciary rule, retirement advisers must still provide good advice to their clients, they say.
The Labor Department issued the fiduciary rule last April during the Obama administration, but it was not scheduled to go into effect until next month. At Trump's request the agency proposed to delay the rule until June, giving Republicans more time to kill the rule.
The Democrats called the delay of the fiduciary rule "inappropriate," because it already went through an extensive rulemaking process, including “more than six years of research, consideration of more than 300,000 comments, four days of hearings, and hundreds of meetings.”
“It is unacceptable that now — roughly a month before implementation of the final rule is scheduled to begin — the [Labor Department] is carelessly proposing to delay it,” they wrote to the Labor Department.