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DOL Fiduciary News: April 11, 2017

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The Fiduciary Rule Is Delayed. So Now What?

The Wall Street Journal; April 10, 2017

In delaying Monday’s initial compliance deadline for a new retirement-savings rule, the Trump administration has given the financial-services industry a breather and some clues into how the regulation might change.

But investors and advisers will have to wait at least until year’s end for clarity on whether the fiduciary rule—which aims to ensure that retirement savers get conflict-free advice—ultimately stays, goes or gets revised.

The delay in the fiduciary rule’s applicability date to June 9, made official Friday, gives the Labor Department more time to execute an order from President Donald Trump to re-evaluate the rule’s potential economic impact on firms and consumers. It also gives a bit of a reprieve to parts of the industry that have stood to be most affected and have struggled to come into compliance.

While the regulation’s fate remains uncertain, some experts say the Labor Department’s approach to the delay suggests the fiduciary rule will be revised rather than rescinded. Rob Cirrotti, head of retirement and investment solutions at Pershing LLC, a division of Bank of New York Mellon Corp., said the delay notice signals that “certain elements are here to stay” and some others may be watered down or revised out.

Vocal Minority: Fiduciary Rule Opponents

The Wall Street Journal; April 10, 2017 9:31 a.m. ET

In the weeks since President Donald Trump ordered an economic review of a new retirement-savings regulation that was due to take effect Monday, brokers and insurance agents stepped up their contention that the rule as currently crafted would hurt their businesses and smaller savers.

These opponents, in letters to the Labor Department during a reopened comment period, say the fiduciary rule would leave those with small retirement accounts with fewer investment choices and reduced access to financial advice. Many have said they would have to close their practices or stop serving less-profitable clients.

Proponents, many of whom also spoke out during the initial approval process and the recent comment period, say these are spurious arguments being made by those who are profiting from selling products with hefty fees attached. Both traditional financial advisers and robo advisers stand ready to serve smaller retirement savers if the fiduciary standard is implemented, they say.

The 193,000 comments and petitions showed broad support for the rule to move forward as planned, with those opposing a delay outnumbering those who wanted a delay by a nearly 12 to 1 ratio, the Labor Department said in announcing that the rule’s implementation had been delayed at least until June 9.

Among those who commented or petitioned, 178,000 opposed any delay in the rule’s applicability, the agency said. About 15,000 commenters and petitioners supported a delay of 60 days or longer, with some requesting a delay of at least 180 days, 240 days and a year or longer, it said.

DOL Not Backing Down From Fiduciary Rule, Analysts Say 

InsuranceNewsNet; April 10, 2017

While the Department of Labor delayed the controversial Obama-crafted fiduciary rule for 60 days, it also expressed surprising support for the regulation.

“The DOL clearly does not back down from the Fiduciary Rule and exemptions as a general matter,” wrote Drinker Biddle & Reath in a client alert (

The 60-delay was published Friday in the Federal Register and moved the fiduciary rule “applicability date” from April 10 to June 9. The election of regulation foe Donald J. Trump was thought to mean the end of the fiduciary rule.

Drinker Biddle, whose attorneys represent several insurance marketing organizations, isn’t so sure. The firm points to this passage in particular:

“(The DOL) ... concluded that it would be inappropriate to broadly delay application of the fiduciary definition and Impartial Conduct Standards for an extended period in disregard of its previous findings of ongoing injury to retirement investors.”

In effect, the DOL is confirming that the new definition of fiduciary advice and the “best interest” standard of conduct (and other Impartial Conduct Standards) will apply on and after June 9, Drinker Biddle attorneys wrote.

Insurance regulators may update annuity sales model amid DOL fiduciary rule uncertainty; April 11, 2017

A new Annuity Suitability Working Group is deciding whether the National Association of Insurance Commissioners should update the NAIC's Suitability in Annuity Transactions Model Regulation (Model Number 275). The NAIC gave the model its last major update in 2010.

The working group is also supposed to come up with ideas for persuading more states to adopt the 2010 version of the model.

The working group met in person for the first time Saturday, in Denver, at a session at the NAIC's spring meeting. The working group heard presentations from NAIC staff members, consumer groups, insurance company representatives and insurance agent group representatives.

The working group is part of the Life Insurance and Annuities Committee. Members of the committee decided to create the working group in February, during a conference call meeting. Regulators agreed that President Donald Trump's push to delay implementation of the DOL fiduciary rule makes this a good time to review the NAIC's annuity suitability model.

( for the spring meeting.  (

Betterment balances hope and concern for fiduciary rule's destiny

Financial Planning; April 10 2017

When the Department of Labor fiduciary rule was finalized last year, Betterment CEO Jon Stein was among the digital-first executives celebrating its signing in Washington.

But on Monday, instead of observing the rule going into effect, Stein was flanked by fiduciary rule supporters at Betterment's midtown Manhattan office, saddened by its 60-day delay and mulling its potential repeal.

"It was supposed to be a great day for investors," Stein said. "[I'm concerned] investors are not going to get what they deserve. At the moment there's so much attention on this issue, people are asking their advisers if they are fiduciaries. I worry that if the rule doesn't go through, all of that goes away, and the industry reverts back to the same old practices."

Treasury inviting financial services executives to discuss regulatory reforms; Monday, 10 April 2017

The Treasury Department is planning to meet with financial services executives to develop regulatory core principals in accordance with President Donald Trump's Feb. 3 executive order, which targeted the Dodd-Frank Act and financial regulation more broadly.

About 20 insurance companies will be meeting with Treasury officials April 13 to talk about a wide range of regulatory issues, MetLife Inc. CFO John Hele said in an interview.

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