DOL May Modify Fiduciary Proposal

By ASPPA Net Staff • July 20, 2015 • 0 Comments
The Department of Labor (DOL) will be changing its proposed fiduciary rule regarding brokers, DOL Deputy Assistant Secretary Timothy D. Hauser said on July 16. Hauser made his remarks at a Washington, D.C. meeting of the Securities and Exchange Commission’s Investor Advisory Committee.

Hauser told the committee that the DOL will change its proposal regarding investment advice standards for brokers that work with retirement accounts, Investment News reports. Improving the marketplace is more important than the integrity of the DOL’s proposal, he indicated.

Central to the July 16 discussion was the best interest contract (BIC) exemption. Hauser said that in making its proposal about the BIC exemption, the DOL seeks an “upfront, enforceable commitment of fiduciary status.” But according to Investment News, Hauser also said that the DOL tempers that goal with flexibility regarding when contracts are signed, and that the DOL wants to make the rule and compliance with it “as easy and non-problematic as possible.”

Jerome Lombard, president of Janney Montgomery Scott, reportedly was not impressed, telling attendees that while he supports a best-interest standard, the disclosures that firms would have to make under the proposed rule would be “onerous” and expensive for them — and, ultimately, clients — and would lead to litigation.