Financial industry: Slow down on financial adviser rules

The financial industry is pushing the Labor Department to pump the brakes on controversial new rules regarding retirement investment advisers.

A group of 16 of the nation’s largest financial trade groups told the Labor Department Wednesday that newly proposed rules represent a “watershed event” for the industry, and they need more time to digest it.

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The groups, including the Financial Services Roundtable, the American Bankers Association, and Investment Company Institute, are pushing for 120 days to comment on recently proposed rules — currently regulators are granting just 75 days to weigh in on the plan.

The push to delay the rules is the latest in a long-running fight between the government and the investment industry over the rules, which would impose new requirements on professionals that provide investing advice tied to retirement plans.

The Obama administration and many Democrats want to require those advisers to be required to act solely in the best interests of their clients, arguing that too often investors are pushed toward poor-performing products that reap high fees for the advisers.

Meanwhile, the financial industry has fought the initiative every step of the way, arguing that imposing the new requirement would simply drive away advisers from many Americans, particularly on the lower end of the income scale.

The effort to impose such a requirement has dragged on for years, but recently got a boost of energy when President Obama publicly threw his weight behind the rules and pushed to have them re-proposed.

At the same time the industry was pushing for a delay, a group of left-leaning groups and financial reform advocates announced they had collected more than 225,000 signatures pushing for tough rules.