LUBBOCK, Texas -
The Lubbock Chamber of Commerce's role in a coalition challenging the Department of Labor's Fiduciary Rule in federal court is prompting resignations from some members.
The Chamber, along with nine plaintiffs, is taking part in the lawsuit against the Feds over new regulations that will set Department of Labor standards for financial planners.
Chamber staffers say the new rules will make it harder for Texas businesses to help provide their employees with retirement security and make it much more expensive and difficult for average Texans to save for retirement.
The financial advisers with Evensky and Katz Foldes Financial disagree.
"We simply believe anyone providing advice to anyone regarding any of their investments, but certainly their retirement investments, to be held to what's called the fiduciary standard meaning the advisor needs to pay the interests of their clients before theirs and their company," said Harold Evensky, Evensky and Katz Financial chairman.
In the letter to the chair of the Chamber board, members of the firm said " the DOL Fiduciary Rule is enormously beneficial to millions of Americans who work and sacrifice to save for their own retirement. As a nation, we ought to be encouraging retirement security and the best outcomes for hard-working retirement investors."
The Chamber responded by saying they "stand by our initial concerns about the effect of the rule on 401(k) plans, sales activities, compensation arrangements and access to quality, affordable investment advice."
Full statement from the Chamber of Commerce:
The Lubbock Chamber of Commerce continues to oppose the final Fiduciary Rule and is proud to be part of a broad coalition challenging it in federal court. This rule will make it much harder for Texas businesses to help provide their employees with retirement security, making it much more expensive and difficult for average Texans to save for retirement.
The compliance and liability costs for small plan advisors under this rule are going to be much, much higher, and some (or all of it) will be passed onto small business clients. The expanded ERISA fiduciary liability will increase advisors’ litigation risks, requiring advisors to get new professional insurance policies, even as the rule creates a new cause of action, increasing lawsuits. In fact, many advisors may no longer find it profitable to serve small plans and individuals with small account balances.
In consultation with the coalition's legal counsel Eugene Scalia as well as outside ERISA counsel, we stand by our initial concerns about the effect of the rule on 401(k) plans, sales activities, compensation arrangements and access to quality, affordable investment advice. We are happy to visit directly about specific areas of the rule with members.
The Lubbock Chamber earlier this month joined in the lawsuit filed by U.S. Chamber of Commerce, Greater Irving Las Colinas Chamber, Lake Houston Chamber, Financial Services Institute, Financial Services Roundtable, Insured Retirement Institute, Securities Industry and Financial Markets Association and Texas Association of Business, to challenge the legally-flawed regulation.
