Industry reaction to White House revelations about provisions in the Department of Labor’s (DOL) final fiduciary proposal has begun.
The Financial Services Institute (FSI), for one, isn’t happy. The industry advocacy organization has long opposed the rule, arguing that its costs will prevent affordable advice for middle and lower income Americans.
“The Department of Labor’s two earlier proposals were complex and unworkable,” said FSI president and CEO Dale Brown. “As we have said since day one, there is no compelling evidence this rule is necessary to achieve a uniform fiduciary standard, and DOL’s own analysis fails to make the case. We will spend the coming days thoroughly analyzing this rule to determine if it protects Main Street investors by preserving their access to affordable, objective financial advice delivered by their chosen financial advisor.”
Broker-dealer powerhouse Raymond James released a statement that notes the Florida-based firm’s commitment to improving the rule for advisors since it was first introduced. Now that’s it’s been released, the firm is taking a measured approach.
“…we are examining it closely to understand how we can best preserve client and advisor choice; keep costs down for clients; support advisors in serving any client they choose to work with; and protect advisors by providing resources to help them efficiently comply with the rules,” the firm wrote. “We believe that carefully studying the rule will take time, but are hopeful that a thoughtful response will yield the best outcome for clients and their advisors.”
Investment managers were more complimentary, with Roger Ferguson, president and CEO of TIAA, noting “Based on our preliminary analysis, it appears the Department has gone a long way toward making the best interest standard the industry standard. TIAA supports this direction, and we look forward to reviewing the full rule.”
“Putting the customer first is a core TIAA value, and we believe adhering to a best interest standard under the Department’s new regulation is an important way to help more people build financial well-being.
“IRAs are a key part of creating retirement security, so we agree with the requirement that distribution advice be subject to the same fiduciary standard as all other investment advice. This will ensure that rollover discussions, including whether to roll over from an employer-sponsored plan to an IRA, are always in employees’ and retirees’ best interest.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
