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DOL Fiduciary News: March 13, 2017

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DOL Issues Temporary Enforcement Policy on Fiduciary Rule

ThinkAdvisor; March 10, 2017

The Department of Labor’s Employee Benefits Security Administration issued a temporary enforcement policy on Friday regarding its fiduciary rule.

In its Field Assistance Bulletin 2017-01 (, EBSA states that “although the department intends to issue a decision on the March 2 proposal in advance of the April 10 applicability date, financial services institutions have expressed concern about investor confusion and other marketplace disruption based on uncertainty about whether a final rule implementing any delay will be published before April 10, whether there may be a ‘gap’ period during which the fiduciary duty rule becomes applicable before a delay is published after April 10, or whether the department may decide either before or after April 10 not to issue a delay based on its evaluation of the public comments.”

Labor puts fiduciary rule’s private right of action under microscope; March 10, 2017

Will the fiduciary rule give way to frivolous class-action claims brought under the Employee Retirement Income Security Act?

That question is at the forefront of the Labor Department’s new analysis of the rule, ordered by President Trump.

The answer is in the eye of the beholder. Opponents of the rule have long argued it will be a boon for the plaintiffs’ bar; proponents say the rule’s clear guardrails will protect against frivolous claims, so long as firms comply with the new best-interest standard.

Merrill Opens ‘Pandora’s Box’ With Shift on Commissions: Analysts

ThinkAdvisor; March 10, 2017

Merrill Lynch told its Thundering Herd Thursday that it plans to explore “options” for at least some clients who might benefit from commissions in retirement accounts, a shift from its earlier fee-only approach to the new Department of Labor’s fiduciary standard.

Analysts say this step represents a sea change in the approach it outlined in October.

“Regardless of the ultimate path that Bank of America chooses to take, Pandora’s box has been opened, and the fee discussion is now front and center for clients, so whether or not the fiduciary rule is implemented in its current state may be a moot point,” according to Brian Kleinhanzl and Michael Brown, CFA, of Keefe, Bruyette & Woods.

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