Commentary on ThinkAdvisor article by Bernice Napach
The Department of Labor’s fiduciary rule went into only partial effect June 9, and the final rule scheduled for January 1 may still be heavily revised, ThinkAdvisor writes. If the rule’s Best Interest Contract Exemption is nullified, however, it would undo the progress already made, Jon Stein, the founder and CEO of Betterment, tells the publication in a statement.
Fiduciary Rule Continues Facing Opposition
The DOL is expected to open the rule to public comment on whether the January date needs to be delayed further or if the industry needs further exemptions, ThinkAdvisor writes. The agency may also seek comment on whether the rule cuts access to retirement advice, disrupts the advice industry or could lead to more litigation, according to the publication.
Labor Secretary R. Alexander Acosta, speaking at a Congressional committee earlier this month, said that the DOL hadn’t properly considered concerns that the rule would limit retirement investors’ options, according to ThinkAdvisor. Meanwhile, the House passed a Dodd-Frank Act replacement bill that would repeal the DOL’s fiduciary rule, although the bill isn’t expected to get Senate approval, the publication writes. House Republicans and Senators have also introduced two companion bills on retirement advice specifically that would undo the DOL’s fiduciary rule, according to ThinkAdvisor.
Stein is particularly worried that the DOL’s review will lead the agency to do away with the BIC exemption, the publication writes. The rule requires retirement account advisors to file a BIC if they want to make commissions off products, but that part of the fiduciary rule isn’t going into effect until January, pending DOL’s review of the rule, Stein tells the publication. Without the provision, the rule would become “an empty and unenforceable legal standard,” he tells ThinkAdvisor in a statement.
If the DOL does require the BIC, that section of the rule must be in “plan English,” Ryan Parker, CEO of Edelman Financial Services, tells the publication. The exemption shouldn’t be “open to the interpretation of 500 different corporate counsel,” he tells ThinkAdvisor.
Source: ThinkAdvisor
Posted by: The Wealth Advisor
