By Kenneth E. Bentsen, Jr.

The following op-ed was published in The Hill February 9, 2017.

Over the last several days there has been a fair amount of chatter around the Department of Labor’s pending fiduciary rule, which we believe could make retirement saving more difficult for many Americans.  I’d like to set the record straight.

First, the industry has been working diligently over the past eighteen months to prepare to comply with the rule before it becomes applicable on April 10, 2017.  Our member firms have undertaken this effort not because we agree with the rule, either in whole or in part, but rather if it’s the law, we comply. The industry will endeavor to undertake what its regulators task it to do, but that doesn’t mean the rule is without flaws (it isn’t), or that the implementation timeline wasn’t realistic (it wasn’t), or that the implementation timetable demanded by the rule won’t have consequences (it will).

Second, some have suggested that the industry opposes the rule because it is anti-investor. The facts and record state otherwise. The industry has publicly and robustly supported a best interest standard for brokers and dealers who provide personalized investment advice. We believe that when providing advice, regardless in what type of account, it should be in the client’s best interest.

We have been extremely clear on this point in our comments to the SEC in 2010, 2011, and 2012 as well as to the DOL in 2011 and 2015.  We have also been clear that we believe the SEC is the right agency to implement this rule, just as Congress said in law in 2010.

The DOL is not the agency to accomplish this task, and its rule will result in less choice for investors, something Congress explicitly sought to protect in law; add complexity by creating yet another standard of care, which Congress and the industry sought to avoid; and add unnecessary legal liability.

Third, the administration is on solid ground in requesting that the Department undertake a review of the impact the rule could have on investors and market place. In 2009, the Obama administration undertook a similar effort with respect to a DOL rule involving advice, and in fact, that effort led to a wholesale re-write of the original proposal.

Contrary to some commentary, the pending application of the DOL rule is already having consequential impact on the marketplace with some firms announcing that they will no long offer mutual funds in brokerage IRA accounts, others no longer offering any IRA brokerage accounts, firms reducing web based financial education tools, and others announcing that lower balanced accounts will be discontinued. Mutual funds are not some exotic product, and while our members offer both fee based advisory and commissioned based brokerage accounts, it should be the investor not the government who chooses which service they wish to buy. Limiting access to financial education tools makes no sense, and cutting access to any advice is even a worse idea. Given that we now have evidence of the rule’s impact, it’s only common sense that policy makers should undertake a review.

It is important to cut through the rhetoric and seek a policy solution that is in the best interest of the client. We continue to support the establishment of a best interest standard that applies to all retail brokerage accounts. We continue to believe the SEC is the right agency to undertake this task. We believe the DOL rule has serious flaws, and those flaws are already resulting in negative consequences for the investors the rule seeks to help. Just as our industry will continue to comply with the rules Congress and regulators establish, because they are the law, we will also continue to advocate for good policy that benefits our clients and marketplace.

Kenneth E. Bentsen, Jr. is SIFMA President & CEO