DOL Reverses Course; Opts For Hearing On Investment Advice Rule

By John Hilton

The Department of Labor will hold a public hearing on its controversial investment advice rule after all.

In a Friday notice published in the Federal Register, the agency said the virtual hearing is set for Sept. 3 at 9 a.m. A second day is reserved for Sept. 4 if needed.

Requests to testify, including an outline of the issues you propose to address in your testimony, must be submitted through the Federal eRulemaking Portal: www.regulations.gov at Docket ID number: EBSA-2020-0003, the notice reads. Follow instructions for submitting comments.

The comment period closed Aug. 6 with 105 comments on the rule, which was designed to replace a tougher Obama-era regulation.

It is the third rule put forth by the DOL. Under Obama, a 2010 rule was pulled following the public comment period after vehement opposition. The DOL returned with a new fiduciary rule in 2015 and the ensuing comment period, which was reopened at one point, generated 3,134 comments. That rule was later tossed out by a federal appeals court.

Each presenter will be allotted a minimum of ten minutes in which to complete his or her presentation, the DOL said. Depending on the number of people and organizations wishing to comment, the number of speaking slots might be curtailed, the DOL said.

"The Department expects to organize the hearing into panels of witnesses with several witnesses on each panel," the DOL wrote. "The Department will assign panel slots only to those persons or organizations whose outline indicates that they will present material factual issues that cannot be fully explored through written submission."

The Trump replacement rule has two main parts: a new exemption allowing advisors to provide "conflicted" advice for commissions; and a reinstatement of the "five-part test" from 1975 to determine what constitutes investment advice.

The new investment advice rule has come under fire from industry analysts for vague language and the confusion it could create. Meanwhile, consumer groups say the rule opens the door for industry sales abuses.

The decision to add a public hearing came days after a trio of senators excoriated the department for its rulemaking methods.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.