Warren Calls Out Financial Services Firms on Fiduciary Rule Claims
A couple of powerful congressional voices have taken several financial services firms to task for characterizing the Department of Labor’s (DOL) fiduciary rule proposal as “unworkable” with dire consequences if enacted — while painting a very different picture for their investors.
In a letter to Secretary of Labor Thomas Perez
and Office of Management and Budget Director Shaun Donovan (whose office is now reviewing the DOL’s proposal), Sen. Elizabeth Warren (D-Mass.) and Rep. Elijah Cummings (D-Md.) highlighted apparently contradictory comments made by several financial services executives. The letter cited comments made by executives from a number of firms — specifically, Lincoln National, Prudential, Jackson National and Transamerica — who the letter said predicted “dire consequences” from implementation of a rule most described as “unworkable.”
However, the Warren/Cummings letter asserted, “In contrast to their public doomsday predictions, industry leaders have told their own investors that they ‘don’t see this as a significant hurdle,’ ‘will once again respond to marketplace or regulatory changes effectively,’ and are well-positioned to ‘adapt to any regulatory framework that emerges.’”
The letter noted that, “Publicly traded companies are rarely held accountable for the assertions they make when lobbying in Washington, even if those assertions are untrue. But when communicating with investors, publicly traded companies are required by law to provide full and accurate information about any material matters that may affect their business models or stock valuations.”
Leaving little doubt as to which perspective the letter’s authors considered to be a more accurate assessment of the impact of the fiduciary rule.