Some financial service firms are "freely acknowledging" they stand to make more money servicing fewer clients as a result of the Labor Department's fiduciary rule, which is expected to result in more retirement investors being moved to fee-based advisory accounts from commission-based brokerage accounts.
Rep. Bill Huizenga, R-MI, offered that claim during a House Financial Services subcommittee hearing exploring the rule's impact on capital markets.
Huizenga claimed that representatives from several firms have told him that fee-based advisory accounts, which charge a percentage of assets annually and are recognized as being favored by the rule, will result in increased profits. The congressman did not identify those firms by name.
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