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DOL Fiduciary News: August 8, 2017

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Insurers, Trade Groups Seek Further Delay in Final DOL Rule Deadline 

Best's News Service via Bestwire -- August 07, 2017 03:54 PM

WASHINGTON -- Life insurers and trade representatives urged the U.S. Labor Department to delay and modify elements of the newly effective fiduciary rule before its final deadline in January 2018, preventing the rule from further upending the retirement advice industry.

“The regulation — through a highly burdensome and paternalistic approach to regulation — effectively substitutes the judgment [and biases] of the department (DOL) for the judgment of individual investors and qualified plan sponsors,” said the American Council of Life Insurers in a comment letter on the rule.

“The ongoing harm to retirement investors as a result of this rule-making project is not speculative – it is very real and supported by data and evidence,” said the statement signed by James Szostek, ACLI vice president, taxes & retirement security; and Howard Bard, ACLI vice president, taxes & retirement security.

“Due to the regulation’s bias against commission-based compensation arrangements, the regulation has already resulted in restricted consumer access to annuities,” they said.

Providers Voice Concern about Fiduciary Rule Product Disruption 

PLANSPONSOR.COM | August 07, 2017

The second of the Department of Labor’s aggressive deadlines for submitting responses to a crucial request for information (RFI) process regarding a possible additional delay or full-scale repeal of the fiduciary rule expansion has arrived today, August 7, 2017.

The RFI process included an earlier deadline for responses to the restricted question of whether or not the fiduciary rule implementation should be slowed or indefinitely delayed. This second deadline pertains to the full RFI issued only a short time ago by the DOL, in which the department asks a number of wide-ranging questions about ways the Obama-era rule expansion might enhance or impede the advice retirement investors receive, including whether firms are changing their business models in response to the rule; whether the rule will cause firms to de-emphasize small individual retirement account (IRA) investors; and to what extent firms are making changes to their investment lineups and pricing in response to the rule. The department also asked about new data or insights about class action lawsuits as an enforcement mechanism.

There were thousands of new comments submitted on these points by a variety of parties, from concerned individual investors to the largest retirement recordkeeping and asset management industry providers. It will take some time to do any kind of scientific analysis of the dense, voluminous commentary. However, even a brief survey makes clear that, for the most part, many providers seem to remain steadfast in opposition to the fiduciary rule. They worry that all of the questions/trends mentioned by DOL, as the full fiduciary rule implementation takes place through 2018 and beyond, will play out poorly for advisers and investors alike.

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