Ensuring Sound Guidance Act

The Ensuring Sound Guidance Act requires investment advisors and retirement plan fiduciaries to prioritize financial factors (like risk and return) in investment decisions, unless clients or participants provide written consent to consider non-financial goals such as environmental or social objectives. If non-financial factors are used, advisors must disclose expected and actual financial impacts over a three-year period. The bill also mandates three studies: one on state/local pension plans potentially subordinating financial interests to non-financial goals, one on climate change disclosures in municipal bonds, and one on rules preventing payments to officials for municipal securities business. These studies aim to assess financial risks and regulatory effectiveness without advocating for specific outcomes.