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DOL Fiduciary News: April 21, 2016

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DOL Accused of ‘Legislation by Rulemaking’ on Fiduciary Rule 

ThinkAdvisor; April 20, 2016

The Department of Labor’s new rule to amend the definition of fiduciary on retirement advice is “legislation by rulemaking,” the former head of DOL’s Employee Benefits Security Administration told senators Wednesday, with the rule that “ultimately passed” running contrary to what Congress intended when it passed the Employee Retirement Income Security Act.

“Regulatory authority delegated to the executive branch by Congress was not intended to make federal regulators an ersatz legislative body, but to facilitate the practical implementation of laws passed by Congress,” Brad Campbell, former head of EBSA who’s now of counsel with the law firm Drinker, Biddle & Reath, told members of the U.S. Senate Committee on Homeland Security & Government Affairs.

Will Fiduciary Rule Spur New Lawsuits Against Advisors? 

Financial Planning; April 19, 2016

With the Labor Department's fiduciary rule finalized, are some advisors now a target for lawsuits?

Experts suggest that the threat of litigation – which exists because the rule provides clients with the right to legal action – could push some firms to change business models and spur some advisors to exit the business.

"Litigation is one area where firms are particularly concerned," says Chris Joline, partner PricewaterhouseCoopers, financial services compliance and regulatory.

51% of advisers see DOL fiduciary rule benefiting business

InvestmentNews; Apr 21, 2016 @ 7:00 am

Just over half of the financial advisers polled a week after the Labor Department released its fiduciary rule think it will be good for business as it will level the playing field for retirement account advice.

Asset manager Pioneer Investments surveyed 861 financial advisers in all 50 states who work for wirehouses, broker-dealers, independent advisory firms and companies with an insurance-based business model. The poll was taken live during Pioneer's April 13 webinar, “The Fiduciary Regulation is Here… Are You Ready?”

Fiduciary Rule Offers Positives for Retirement Plan Sponsors

PLANSPONSOR; April 19, 2016

The Department of Labor’s (DOL) new fiduciary rule creates some onerous requirements for retirement plan advisers, but in many ways will be a plus to plan sponsors and participants.

In a webcast hosted by PLANSPONSOR and sponsored by Voya Financial, Charlie Nelson, chief executive officer, retirement, at Voya Financial noted that because the rule expands the number of situations that are considered fiduciary advice, plan sponsors will see more disclosures and acknowledgements from advisers. The new rule adds to the 408(b)(2) provider fee disclosure requirements. For example, advisers must inform plan sponsors of the scope of monitoring investments.

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