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DOL Fiduciary News: April 6, 2017

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DOL Fiduciary Rule Foes Say Delay Falls Short of Trump Order

ThinkAdvisor; April 5, 2017

While opponents of the Department of Labor’s fiduciary rule welcomed the final rule issued Wednesday delaying by 60 days the rule’s effective date, they’re up in arms over what they says is the failure of the rule to comply with President Donald Trump’s directive to review the rule in its entirety.

At first blush, Labor’s 60-day delay that’s to be released in the Federal Register on Friday “appeared to be a very good first step in the review” ordered by Trump on Feb. 3, said Kent Bentson, a partner at Davis & Harman in Washington. “But the problem is that in yesterday’s announcement, DOL indicates very clearly that it does not plan to revisit the June 9 date in the context of the review” ordered by Trump. 

Fiduciary rule delay offers industry substantial short-term relief; April 5, 2017

The Labor Department’s decision to delay the fiduciary rule’s original April 10 implementation date by 60 days gives the financial services industry considerable short-term relief, according to industry insiders.

Beginning June 9, 2017, industry will have to comply with the rule’s impartial conduct standards, which requires that advice must be in retirement investors’ best interest, compensation must be reasonable, and prohibits institutions and advisors from giving misleading statements to investors.

But beyond delaying the impartial conduct standards by 60 days, Labor’s rule also delays the requirement that financial institutions and advisors provide written acknowledgment of their fiduciary status. That requirement was also scheduled for April 10 implementation, but is now pushed off until January 1, 2018.

New Orleans appeals court denies emergency injunction to stop DOL fiduciary rule

InvestmentNews; Apr 5, 2017 @ 7:04 pm

Financial industry opponents of the Department of Labor's fiduciary rule lost again in federal court on Wednesday.

The Fifth Circuit Court of Appeals in New Orleans denied a request for a preliminary injunction against the regulation that was filed by several industry interest groups. The three-judge panel also denied the plaintiffs' motion for an expedited appeal of the case.

The plaintiffs lost twice recently at the district level in a Dallas federal court, when Chief Judge Barbara M.G. Lynn granted summary judgment in favor of the DOL and then denied the plaintiffs' emergency injunction, which was filed after she decided the case on its merits.

The plaintiffs include the Securities Industry and Financial Markets Association, the Financial Services Institute, the Financial Services Roundtable and the U.S. Chamber of Commerce. Representatives of the organization were not immediately available for comment.

RIAs say DOL rule delay doesn't matter because industry is moving toward fiduciary anyway

InvestmentNews; Apr 5, 2017 @ 2:15 pm

Independent financial advisers are generally shrugging off the Department of Labor's 60-day delay of its fiduciary duty regulation, suggesting that the proverbial horse is already out of the barn.

"The delay is just delaying the inevitable," said Shawn Blau, managing member at ATR Advisors.

"Irrespective of the DOL, the industry is moving toward requiring a fiduciary standard," he added. "Long term, the trend is toward more fiduciary requirements."

$532 A Second: Trump Administration Delay Of Fiduciary Rule Protecting Retirement Savers Will Scramble Nest Eggs Of Tens Of Thousands Of Americans

WASHINGTON, April 5, 2017 /PRNewswire-USNewswire/ -- A new "Retirement Ripoff Counter" unveiled today at an event headlined by U.S. Senator Elizabeth Warren and AFL-CIO President Richard Trumka, along with Americans for Financial Reform and the Consumer Federation of America, shows in graphic terms how important it is for Americans' retirement security that the fiduciary rule be fully implemented. Every day that conflicted advice continues costs them $46 million a day, $1.9 million per hour, and $532 a second.

Yesterday, the Department of Labor finalized a decision to delay the rule by 60 days, and a review targeting the rule for changes continues.

During today's one-hour news conference, the cost of delaying the rule rose $1.9 million. To underscore the huge toll of conflicted advice, and the need for the rule to be implemented in full and without delay, the Retirement Ripoff Counter will be projected tonight onto the sides of two Washington, D.C. buildings: the Department of Labor and the U.S. Chamber of Commerce.

Fiduciary Delay Doesn’t Faze Morgan Stanley

The Wall Street Journal; Apr 6, 2017 5:30 am ET

Morgan Stanley is moving ahead with changes related to the now-delayed fiduciary rule, such as lowering commissions and reducing the number of mutual funds it offers, according to a memo viewed by The Wall Street Journal.

Beginning in May, the bank will introduce a new commissions structure for stocks, exchange-traded funds, annuities and unit investment trusts that will “substantially” reduce some investors’ costs, the memo says, Morgan Stanley opted to proceed with its new cost structure as planned instead of abandoning it after the Labor Department said it would delay its fiduciary rule requiring brokers to put the interests of retirement savers ahead of their own by 90 days.

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