The Hill (March 16, 2016 5:00 am) -- Lobbyists for business and public interest groups are flocking to the White House in a last-ditch attempt to shape the Labor Department’s hotly contested “fiduciary rule” for investment advisers.

The regulation, which is expected to be released shortly, aims to create a conflict-of-interest standard for advisers who guide consumers through their retirement plans.

The effort has stirred controversy, with business groups denouncing the plan as unnecessary and counterproductive.

They’ve taken those complaints to the White House, where 17 meetings have been held in the past seven weeks over the regulations. The meetings have included advocates from more than two dozen organizations, firms and industry groups, according to an analysis of records by The Hill.

Heavy hitters such as the U.S. Chamber of Commerce; the Financial Services Roundtable; the Securities Industry and Financial Markets Association; the Investment Company Institute; the American Council of Life Insurers (ACLI); and the Spark Institute, an industry group for the retirement plan industry, have all attended White House meetings the last two months.

“This is a topic of interest to virtually everyone in the [financial services] industry,” said Michael Hadley, a partner at Davis & Harman, who has been in recent meetings. “It seemed like [officials] were genuinely interested in the points we made.”

The Save Our Retirement Coalition has also aired its views to the administration. The coalition includes public interest and watchdog organizations supportive of the Labor Department’s efforts, including the AARP, Better Markets, Consumers Union, the Main Street Alliance and the Center for American Progress.

“From a process perspective, the rule has been in the making now for six years; there’s been a ton of back and forth,” said David Certner, the legislative counsel and legislative policy director for government affairs at the AARP.
“I’m expecting them … to be open to changes in a number of areas to make the rule work better,” Certner said. “But we were generally pleased with the framework they had.”

In the meetings, organized by the White House Office of Information and Regulatory Affairs (OIRA), administration officials hold the details of the regulation being reviewed close to the vest. Generally, they listen to the presentations and only ask questions when they need a point clarified.

Proponents of the fiduciary proposal such as President Obama and Sen. Elizabeth Warren (D-Mass.) say it is needed to protect individuals from unscrupulous retirement advisers who generate large profits for themselves at the expense of workers and retirees.

Although many of the opposing groups agree with the intent of the rule, the financial services industry has said that the 121-page proposal would ultimately hurt the investors it aims to protect, largely by making retirement advice more expensive and harder to obtain.

The U.S. Chamber of Commerce is among the fiercest critics of the rule and has vowed to use any method at its disposal to fight it, including litigation.

“We’ve had very strong conversations with people in the Labor Department and in the White House [about] what has to happen to that rule for it to be acceptable and not destructive to the retirement system of small companies and others,” Thomas Donohue, the Chamber’s president and CEO, told reporters in January.

The business giant has had three meetings at the White House since 2015, according to records. It has said that the Labor Department, which has also faced criticism from the Securities and Exchange Commission for its proposal, did not conduct an adequate analysis of costs and benefits.

“If [the finalized rule] looks appropriate, we won’t have to sue,” Donohue said. “If it’s not appropriate, it’s not just suing; we now have, in the Senate and in the House, much better systems to use the appropriations and other parts of the committee process to work on this deal, and we will.”

The ACLI, which represents life insurance businesses, also pointed to legislative fixes when asking regulators to make changes.

Aspects of two pieces of legislation introduced on Capitol Hill — the Affordable Retirement Advice Protection Act and the Strengthening Access to Valuable Education and Retirement Support Act — should act as a “North Star” as the White House and the Labor Department finalize the rule, said ACLI spokesman Jack Dolan.

The bills, which have gained some bipartisan support, should be “a guide to follow so that a regulation that would be in the best interest of all Americans can be issued,” he said.

The two bills would create new standards for investment advisers, allowing them to sell proprietary products as long as that is disclosed to clients. Language included in both bills says advisers would have to disclose that “the same or similar investments may be available at a different costs (greater or lesser) from other sources.”

On Wednesday morning, additional meetings from last week appeared on OIRA's public disclosure portal. Five meetings were held on Thursday and Friday alone -- with representatives from the National Association of Insurance and Financial Advisors, the Public Investors Arbitration Bar Association, the Alternative & Direct Investment Securities Association, the American Benefits Council and a company called Betterment all having face time with the White House.

The final version of the rule landed at the White House on Jan. 28, 2016. While OIRA has 90 days to review it and send it back to the Labor Department — either with or without demanding alterations — many say that the process will likely be expedited. Multiple sources told The Hill that Friday's meetings with OIRA were the last it was having on the matter.