CRAMER: Statement on President Trump’s Fiduciary Rule Executive Order
WASHINGTON, D.C. -- Congressman Kevin Cramer issued the following statement today on President Trump’s Executive Order halting the Department of Labor’s Fiduciary Rule:
During President Obama’s time in office, it became a reoccurring theme to direct bureaucrats in Washington to issue wide-sweeping regulations on industries, without consulting the people actually being affected. This is the case with the Department of Labor’s Fiduciary Rule.
It is important for financial planners to provide their clients with a number of different options in order to ensure they are able to successfully plan for their future. However, the Fiduciary Rule is a step in the opposite direction. It places unnecessary constraints on financial managers and limits consumer choice. Under the Fiduciary Rule, many financial institutions would have to switch from commission-based models to models that charge a fee based on percentage of assets managed. While a fee-based model makes sense for some savers, mainly higher-income folks, low and middle-income investors would likely end up paying more in fees than they previously had in commissions. This is counterintuitive and does not make economic sense. The rule penalizes low and middle-income individuals, giving them less access to clear financial advice and higher fees for investors who trade infrequently. This harms the very people the Department of Labor is claiming to protect.
I support President Trump’s Executive Order to delay the Fiduciary Rule and allow time to consider repealing or revamping the regulation. We should now work with all stakeholders to ensure retirement savers have broad choices in investments and that financial advisers act in their clients’ best interest when making financial recommendations. I look forward to working with President Trump, my colleagues in Congress, and my constituents in North Dakota in realizing these goals.