06.21.19

Scott, Murray Ask Government Watchdog to Look at Fallout of Trump Administration’s Decision to Abandon Investor Protection Rule Following Fifth Circuit Order One Year Ago

Scott and Murray asked GAO to look at how the financial services industry has responded since the Trump Administration abandoned a rule requiring financial advisors to put their retirement clients’ interests before their own following the Fifth Circuit’s decision

Today, Congressman Bobby Scott (D-VA), chairman of the House Committee on Education and Labor, and Senator Patty Murray (D-WA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, wrote to Government Accountability Office (GAO) Comptroller General, Gene Dodaro, asking GAO to examine the fallout from the Department of Labor’s (DOL) decision not to defend its fiduciary standard after a court decision struck it down—despite the fact that several previous rulings had upheld the standard. The letter was sent on the one-year anniversary of the ruling which struck down the fiduciary standard, an Obama-era rule which protected investors by requiring advisors to put their retirement clients’ interests ahead of their own. 

“In the past year, DOL appears to have done little, if anything, to warn retirement savers that they are now vulnerable to professionals who, according to DOL, have no obligation to put their clients’ interest before their own,” wrote the Members.

“Today, plan sponsors, financial services professionals, and investment advisors must decide whether to retain the new policies and procedures they developed, often at considerable expense, in response to the 2016 Rule,” their letter continued. “Meanwhile, plan participants may experience difficulty in understanding the various duties owed to them by those giving retirement advice and may be receiving conflicted advice.”

Full text of the letter is available HERE. 

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