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DOL Fiduciary News: August 1, 2017

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5th Circuit Hears Latest Round of Fiduciary Rule Arguments

PLANSPONSOR.COM | July 31, 2017

Lawyers for the Department of Labor (DOL) faced tough questions from one judge on the 5th U.S. Circuit Court of Appeals, which on Monday heard oral arguments in the consolidated lawsuit filed to block the DOL’s fiduciary rule expansion by investment and insurance trade groups, among others, including the U.S. Chamber of Commerce.

According to Erin Sweeney, previously a senior benefit law specialist at the DOL and currently a member in the Employee Benefits Policy practice of Miller and Chevalier, who attended the arguments and afterwards shared her analysis with PLANSPONSOR, the DOL had a tough day in court. In particular, one judge on the three-judge panel that has been assigned to the case seemed to have little sympathy for the basic strokes of the DOL’s arguments.

“Judge [Edith] Jones spent a very significant portion of the time of the hearing asking for more or less basic information about whether a sale of a product taken in itself could ever constitute investment advice,” Sweeney explained. Judge Jones did probably 95% of the questioning of the DOL attorneys, and she really took them to task. “It left those of us in the room wondering what the opinions of the other two judges might be. The other two judges were more or less silent.”

Stifel CEO raises doubts about future of DOL rule

InvestmentNews; July 31, 2017 @ 5:18 pm

While many broker-dealers are moving to comply with the Department of Labor's new fiduciary rule, at least one CEO doesn't expect the second phase of the rule to be implemented on schedule — if at all.

Speaking to analysts during a second-quarter earnings call Monday, Stifel CEO Ron Kruszewski said he believes the January phase-two implementation "will be delayed."

During an interview following the earnings call, Mr. Kruszewski cited "further study" of the DOL rule directed by the Trump Administration and consideration of a fiduciary standard by the Securities and Exchange Commission.

The first phase of implementation, originally scheduled for April 10, was postponed until June 9.

Number of experienced defined-contribution plan advisers to grow with DOL fiduciary rule

InvestmentNews; July 31, 2017 @ 11:29 am

Experienced retirement plan advisers represent a small fraction of the overall number of advisers working with defined-contribution plans, but they control a staggering amount of the assets.

Together, the elite DC-plan advisers, the most specialized group, and core advisers, a middle-tier group, represent 10% of all advisers getting paid on or managing a DC plan, but hold 68% of the adviser-controlled plan assets, according to figures from The Retirement Advisor University.

"Emerging" advisers, the least specialized of the bunch, represent the remaining 90% of DC-plan advisers and remainder of the $3.56 trillion in adviser-controlled plan assets. DC plans hold $7 trillion in aggregate. 

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