DoL won't delay fiduciary rule, will go into effect June 9
- Author: Zachary Reyes May 23, 2017,
May 23, 2017, 18:50
The US Labor Department will implement its fiduciary rule on June 9 with no further delays, marking a short-term win for consumer protection advocates.
"The rule's critics say it would limit choice of investment advice, limit freedom of contract, and enforce these limits through new legal remedies that would likely be a boon to trial attorneys at the expense of investors".
The rule goes into partial effect on June 9, with full implementation on January 1, 2018.
He also said the department was seeking "public comment" on how to revise the rule, leaving open a possibility of repealing the rule in future. Some have called for a complete delay of the rule.
In an op-ed for the Wall Street Journal that was published Monday night, Acosta said the department "found no principled legal basis" for delaying the rule further while it seeks feedback from the public about the rule and its potential impact on retirement savers.
"Respect for the rule of law leads us to the conclusion that this date can not be postponed".
He also noted that while under the previous administration, "the Securities and Exchange Commission declined to move forward in rule-making" despite its "critical expertise in this area", he hopes that in this administration the SEC will be a "full participant".
"We are confident that any data-driven, robust analysis that fairly considers the facts will prove again that Americans saving for retirement deserve to have their best interests put above their financial advisers' economic interests", adds Dennis Kelleher, president of advocacy group Better Markets.
However, some financial firms and industry groups say the approach may have the unintended effect of limiting savers' options if some brokers decide to eliminate some investments they fear will face more scrutiny under the rule.
"NAPA recognizes that many in the industry are going to be concerned about where we go from here", commented American Retirement Association CEO and NAPA Executive Director Brian Graff.
The Labor Department's fiduciary rule requires firms to eliminate any conflict of interest, such as certain sales incentives for brokers who are advising clients on their retirement savings.