U.S. securities regulator says 'disappointed' by retirement advice rule

WASHINGTON (Reuters) - The sole Republican member of the U.S. Securities and Exchange Commission, Michael Piwowar, expressed deep skepticism about a retirement advice rule that the Labor Department released on Wednesday, a sign of potential conflict over the long-awaited regulation.

“I am disappointed that the rule announced today seems to ignore the chorus of voices that questioned whether it will restrict middle-class families’ and minority communities’ access to professional financial advice by making retirement advice unaffordable,” Piwowar, an SEC commissioner, said in a statement. “I am fearful that those concerns, which were widely and bipartisanly held, will prove to be true once the rule becomes effective.”

The SEC, the country’s chief securities regulator has been crafting its own rule on retirement advice for years. Some lawmakers and industry members had said that the Labor Department, which oversees retirement laws, should hold off until that rule was finalized.

Under the Labor rule that takes full effect Jan. 1, 2018, brokers would have to follow a fiduciary standard, acting in clients’ best interests when advising about retirement accounts. It aims to end potential conflicts of interest by brokers who advise on individual retirement accounts, and to protect consumers from buying unnecessary investment products.

But after a draft was released last year, members of both political parties, along with financial services firms, expressed concern that the rule would drive up costs and put professional advice out of reach for middle and lower-income people.

Reporting by Lisa Lambert; Editing by Diane Craft