Pressure continues to mount on the Department of Labor to weaken or dismantle the Obama administration-authored fiduciary rule.
The confirmation of Labor Secretary Alexander Acosta Friday led to a missive from GOP legislators urging him to make reforming the rule a priority. Delivered Tuesday, the letter was signed by 124 lawmakers.
The letter repeated industry concerns that small savers will be left behind if the fiduciary rule is fully adopted. In 2015, the Government Accountability Office found that 29 percent of Americans ages 55 and older had no money saved for retirement and no pension, the letter stated.
“One of the primary concerns that our oversight exposed is that financial advisors would be forced to move from commission-based accounts to fee-based advisory accounts, and that advisors would be unlikely to afford to continue providing advice to small, fee-based accounts,” the letter reads.
Acosta gave cagey responses when queried by Senate Democrats on the fiduciary rule during his March confirmation hearing.
Sen. Elizabeth Warren, D-Mass., pointedly asked whether Acosta would defy President Donald J. Trump’s Feb. 2 memorandum ordering the DOL to delay the fiduciary rule.
“There is an executive action that directs how the secretary will approach this rule,” a noncommittal Acosta replied.
A visibly frustrated Warren actually interrupted Acosta’s most expansive remarks on the fiduciary rule, which holds anyone working with retirement dollars to a higher legal standard.
“The rule goes far beyond simply addressing the standards of conduct,” Acosta said before the interruption.
The 60-delay was later published and pushed the “applicability date” to June 9. Lawmakers say that isn’t enough, and urged Acosta to “act expeditiously to reverse this significantly flawed rule.”
More Comments
The DOL accepted comments on both the delay and the rule itself for 15 and 45 days, respectively. The latter date concluded April 17, and the DOL has been posting comments in batches since then.
The 1,450 comment letters include contributions from companies and trade associations on both sides of the issue. In addition, 30 petitions were received by the DOL, including one by Americans for Prosperity.
“This regulation was written using inadequately justified assumptions and hands too much power to government bureaucrats without having fully considered whether federal action was necessary or if less destructive alternatives existed,” reads the petition that claims 456 signers.
Started by billionaire businessmen and brothers Charles and David Koch, Americans for Prosperity has become a major power broker in Republican circles.
Many analysts predict the DOL will pursue another delay and use the time to weaken some of the tougher exemptions within the rule. Eliminating the rule altogether will be much tougher, as courts have a tough burden of proof to reverse rules already on the books.
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.
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THIS WOULD BE A SAVING GRACE FOR THOUSANDS OF FINANCIAL ADVISORS WHO OTHERWISE WERE THINKING OF EARLY RETIREMENT.
The majority of “Financial Advisors” already try to do what’s right but others still sell products that are not in the best interest of the client. This can’t continue to happen! I hope the DOL will remove the wording that provides more government control and we’re smart enough to govern ourselves to do what’s best for the client!
Slimey producers will always exist. All the rules and regulations already in place can’t stop that. This won’t either. It will create a mess for the good people, and will run some of them out of business. A poorly written rule with no real parameters doesn’t make sure clients get their best interest covered.
Just when you thought everything was fine ! Here they come again— Those who create the situation Then they control it Then they profit from it……
Isn’t it interesting that because of court rulings it makes totally killing the insane DOL rule harder.
This bill needs to be killed now and if necessary by a an act of congress. We are not a socialist society and no one needs government
sponsored retirement in any fashion. Just look a what has happened to our Social Security Retirement System, which is nothing more than a government sponsored Annuity with our social security number being our account number.
Everyone should request from Secretary and our US Senators and Us Congressmen to make certain that this 1200 page socialist manifesto
gets killed so that it can never happen again.
The SEC can use “Big Data” as Morning Star suggests to track advisors/brokers/ broker dealers who deal in huge accounts and where the headlines come from of abuse. The SEC can and should continue to enforce ethical practices and allow the thousands of us who live with and advise middle America to go back to work without fear of the trial lawyers embedded class action litigation opportunity afforded them by the DOL Rule.
Everyone is sick and tired of this SAGA thrust upon the industry by Obama and his operatives and it is time for the DOL Rule to die a quick death!