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DOL Fiduciary News: November 28, 2017

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Delay of DOL fiduciary rule enforcement mechanisms now final

InvestmentNews; Nov 27, 2017 @ 2:04 pm

The Department of Labor released a final rule Monday that would delay implementation of the enforcement mechanisms of its fiduciary duty regulation until the middle of 2019.

The rule would postpone from Jan. 1, 2018, to July 1, 2019, the applicability of a legally binding contract between brokers and retirement-account clients that requires brokers to act in their best interests, among other disclosure provisions and prohibited-transaction exemptions being pushed back.

The DOL said it needs the extra time to conduct a reassessment of the rule's impact on retirement advice that was ordered by President Donald J. Trump in a Feb. 3 memo. Two provisions of the rule — one that expands the number of financial advisers who are deemed fiduciaries and another that sets impartial conduct standards — were implemented in June.

"The department is granting the delay because of its concern that, without delay in the applicability dates, consumers may face significant confusion, and regulated parties may incur undue expense to comply with the conditions or requirements that the department ultimately determines to revise or repeal," the DOL stated in the text of the final rule, which will be published in the Federal Register on Nov. 29.

An advocate for the rule asserted that delay means death for the regulation.

Can the SEC and DOL really harmonize advice standards for brokers and advisers?

InvestmentNews; Nov 25, 2017 @ 6:00 am

As regulators struggle to harmonize retail-advice rules, blending them into a single fiduiciary standard, count on hearing some sour notes from the industry. In fact, nowhere is the debate over investment advice standards more discordant than surrounding the term "harmonization."

Over the next two years, harmonization will be at the heart of the work of the Department of Labor and the Securities and Exchange Commission as they try to formulate regulations for retail investment advice.

While the ultimate goal, ideally, would be to create a single, uniform standard for both investment advisers and brokers that investors could readily understand, many in the advice industry have doubts about whether that is achievable. They believe it is more likely that the agencies will come up with a watered-down version of the existing standard that investment advisers currently live by, or create an ostensibly new standard for brokers that won't go beyond requiring some additional disclosure.

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