The Financial Services Institute, which opposes the regulations, argues that implementing the new regulations will lead to high costs for consumers looking for financial advice.
Obama and progressives are pushing for new disclosure requirements for financial advisers to be implemented early next year.
They argue that consumers should know how their financial adviser gets paid. Some advisers receive commission payments from financial institutions.
But the business community, moderate Democrats and Republicans argue that the industry is already regulated enough to weed out and penalize bad actors who take advantage of unsuspecting consumers.
"Overall, we find the Department’s estimates to be vastly understated, especially for smaller firms, and we question the assertion that costs for RIAs will be trivial," according to the study
. “We estimate total start-up costs will be nearly $3.9 billion dollars, nearly 20 times DOL’s preferred estimate.”
The FSI study doesn't take into account the cost of investors' lost access to advice or the ongoing costs of maintaining compliance with the rule. It's solely based on first-time implementation.
“This study shows that the DOL’s proposed fiduciary rule would be costly and burdensome to both the independent financial services industry and the investors that rely on the critical advice they receive,” said FSI President Dale Brown in a statement.
He said, "it also illustrates the unintended consequences the rule will have on hard-working Americans trying to save for retirement, particularly low and moderate-income investors who need advice the most.”