Regardless, industry groups have already signaled heavy opposition to the idea.
Wayne Chopus, president and CEO at the Insured Retirement Institute, said in a LinkedIn post that his organization "will fight this proposal just as we did with DOL's 2016 poorly concocted fiduciary rule that also masqueraded as consumer protection but instead caused extensive harm. A federal court vacated that rule but not before 10 million smaller retirement account owners, with more than $900 billion in retirement savings, lost the ability to work with their preferred financial professionals."
On Capitol Hill, Rep. Virginia Foxx, R-N.C., chair of the House Education and the Workforce Committee, said in a statement that the latest proposal is "just new lipstick on the same old pig, and it will harm retirement plans, retirees, and savers."
She added, "DOL's proposal reaches well beyond its jurisdiction. Instead of regulating retirement plans, DOL is trying to regulate what individuals do with their own retirement savings. This kind of overreaching interference spells disaster."
But Foxx's counterpart on the committee, Ranking Member Bobby Scott, D-Va., had a different viewpoint and said the proposal is crucial to help workers better prepare for retirement. "While most advisers put their retirement clients' interests first, unscrupulous retirement professionals continue to pad their own pockets by steering clients to high-fee investment products that produce lower returns for retirement savers," Scott said.
Consumer groups also welcomed the proposal. In a joint statement, steering group members of the Save Our Retirement coalition, which includes organizations like AARP, AFL-CIO, Consumer Federation of America and the Pension Rights Center, said the proposal is "a major milestone in the long fight to bring millions of Americans one step closer to a secure, dignified retirement. We look forward to reviewing this proposal in detail, submitting our comments, and working to help craft the strongest possible rule to ensure that retirement savers receive investment advice that is in their best interest, not the self-interest of the financial professionals they turn to for advice about their retirement investments."
When asked last month if the latest proposal is likely to face a legal challenge, Fred Reish, a partner at Faegre Drinker Biddle & Reath, told Pensions & Investments: "I can't imagine that it won't be (challenged), I don't even see that as one of the options on the table."