[Congressional Record Volume 161, Number 106 (Thursday, July 9, 2015)]
[House]
[Pages H4959-H4960]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      PROPOSED FIDUCIARY STANDARDS

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Florida (Mr. Jolly) for 5 minutes.
  Mr. JOLLY. Mr. Speaker, most economists and financial advisers have 
recognized that families across the United States are headed toward a

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major retirement crisis. Studies have shown that a majority of 
households headed by someone aged 59 or younger are in danger of 
suffering from falling living standards in their retirement years.
  And so the administration and this Congress should be advancing 
policies that make retirement counseling, savings advice, and 
investment services more accessible, not less. Retirement planning, 
savings counseling, and investment advice can improve the quality of 
life and economic stability of every American.
  Yet recent actions by this administration, however well intended, 
will make these financial services less accessible and less affordable 
to those who are in most need of them by forever changing the rules 
regarding financial advising related to retirement accounts.
  Mr. Speaker, for years the community of financial advisers, including 
those throughout Pinellas County and the Tampa Bay area that I have the 
privilege to represent, has been governed by what is known as the 
suitability standard; that is, a financial adviser is required to 
provide financial counseling and investment recommendations that are 
suitable for a client based upon that client's financial position and 
financial goals. The suitability standard requires advisers to act 
fairly in dealing with clients.
  This suitability standard has served individual investors well for 
many years, creating a market for financial services for new and low 
dollar investors seeking basic investment services and thoughtful 
financial and retirement planning.
  But the administration is now in the process of replacing that 
standard with a new standard called the fiduciary standard. This new 
standard, under the guise of protecting investors, will actually have 
the opposite effect. The administration's proposed rule will ultimately 
reduce or, in some cases, eliminate financial counseling, products, and 
services to new and low dollar investors. The rule will result in the 
elimination of financial products that adequately compensate advisers 
for their services, and it will increase the cost of compliance on 
advisers who ultimately will need to pass on those costs to clients 
through a higher fee structure. And it will simply cause some advisers 
to cease serving many clients who are, in fact, in most need of 
financial services.
  But worse, Mr. Speaker, the Department of Labor's new rule reflects 
the approach we continue to see from regulators throughout this 
administration, an arrogant and demeaning suggestion that industry 
throughout America is necessarily comprised of all bad actors, and 
unless these actors are forced to do so by this administration, they 
will no longer do right or do good but for the heavy hand of government 
and the heavy hand of this administration making them do so. It is a 
Washington-knows-best approach that communities across the country 
continue to reject.
  My message today is a simple one: The administration can do better. 
Do not issue the proposed new fiduciary standard rule.
  The Department received thousands of comments about the proposed rule 
and seemingly ignored them all.
  Members of Congress from both sides of the aisle have sent letters to 
the Department of Labor expressing the negative impacts that this 
proposal would have on their communities, and we have begged the 
Department of Labor to revisit this rule and simply do better on behalf 
of the American people.
  Congress has also taken action on its own and will continue to do so. 
Recently, the Appropriations Committee included provisions within their 
respective bills in the House and Senate to halt the administration 
from moving forward on this perhaps well-intended but completely wrong 
proposed rule. It was right that we did so.
  The administration simply must do better. It starts with recognizing 
that the financial adviser industry is comprised of men and women 
across this country who provide a valuable contribution to individuals 
and couples seeking retirement guidance.
  Then let's realize that transparency and sunlight can solve most 
concerns. But to instead impose a new legal standard that will only 
increase compliance cost, result in expensive and needless litigation 
and ever more trial attorney fees and will ultimately eliminate 
financial counseling to hundreds of thousands of families who need it 
most, well, Mr. Speaker, that is the wrong answer.
  Let's keep the suitability standard. Let's trust financial advisers 
for the good service they provide. Let's strictly enforce the current 
law against the very small number of individuals who seek to take 
advantage of individual investors. Let's protect financial services for 
those who need them most. And let's revisit a rulemaking process that 
focuses only on transparency, ultimately providing consumers and 
clients with the information they need to make responsible investment 
decisions and to responsibly select a financial adviser that is right 
for them.
  It is time that this administration begins trusting the American 
people.

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