Thinks it’s over? It ain’t over, it’s just changing venues.
Michael Piwowar doesn’t like the Department of Labor’s fiduciary rule, but only because he favors one from the SEC.
In a further sign of a building turf war, the commission’s acting chairman told attendees at a conference hosted by the Mutual Fund Directors Forum on Friday that the SEC could do it better, and develop a rule that businesses “would find less onerous,” according to The Wall Street Journal.
Piwowar, a Republican, said that in light of the fiduciary rule’s delay by the Trump administration, “We at the SEC need to take the opportunity now to fill that space.”
The paper notes Piwowar’s well-known opposition to the Labor Department’s rule.
“He blasted the measure in March, calling it a ‘highly political’ effort guided by the Obama administration. He repeated that criticism on Friday, saying the rule wasn’t written to protect investors but to make it easier for trial lawyers to sue brokers.
“It was meant to be unworkable,” he added Friday.
In early April, the Department of Labor announced a 60-day extension of the applicability dates of the fiduciary rule and related exemptions, including the Best Interest Contract Exemption.
The announcement, which came late Tuesday, follows a Feb. 3, 2017, presidential memorandum which directed the department to examine the fiduciary rule to ensure that it does not adversely affect the ability of Americans to gain access to retirement information and financial advice.
Under the terms of the extension, the DOL is requiring retirement advisors to act as fiduciaries and to give advice that adheres to “impartial conduct standards” beginning on June 9 rather than on April 10, 2017, as originally scheduled.
The fiduciary standard requires advisors to adhere to a best interest standard when making investment recommendations, charge no more than reasonable compensation for their services and refrain from making misleading statements.
The department has requested comments on the issues raised by the presidential memorandum, and related questions. It urges commenters to submit data, information, and analyses responsive to the requests, so that it can complete its work pursuant to the memorandum as carefully, thoughtfully and expeditiously as possible.
In the period between now and Jan. 1, 2018, when all of the exemptions’ conditions are scheduled to become fully applicable, the department intends to complete its review under the presidential memorandum and decide whether to make or propose further changes to the fiduciary rule or associated exemptions.
In the absence of further action by the department, the delay announced today does not affect the requirement to enter into a Best Interest Contract and other requirements that are currently scheduled for Jan. 1, 2018.
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.
