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SEC's Jay Clayton makes fiduciary duty a priority, acknowledges issue is 'complex'
InvestmentNews; July 12, 2017 @ 2:57 pm
In his first major address since taking office in May, SEC chairman Jay Clayton said a fiduciary rule is one of his priorities and that he would like to work with the Labor Department on an advice standard.
"With the Department of Labor's fiduciary rule now partially in effect, it is important that the commission make all reasonable efforts to bring clarity and consistency in this area," Mr. Clayton said in a speech at the Economic Club of New York. "It is my hope that we can act in concert with our colleagues at the Department of Labor in a way that best serves the long-term interests of Mr. and Ms. 401(k)."
The DOL has implemented two provisions of its own regulation, which requires financial advisers to act in the best interests of their clients in retirement accounts. But that measure is undergoing a reassessment mandated by President Donald J. Trump that could lead to revisions.
ETFs and Mutual Funds Square Off in the Post-Fiduciary-Rule World
The Wall Street Journal; July 12, 2017 10:13 a.m. ET
Exchange-traded funds and actively managed mutual funds are competing to see which can gain the most business as the result of the recently passed fiduciary rule.
The U.S. Labor Department rule, which went into effect in June, requires advisers overseeing trillions of dollars of tax-advantaged retirement savings to act in clients’ best interest. That would appear to favor ETFs, thanks to their fee transparency and low costs. By contrast, mutual funds—long a mainstay in retirement accounts—charge a variety of fees that are passed on to brokers, which have become a focal point of debate surrounding the fiduciary rule. That practice becomes more tricky for advisers under the new rule.
But actively managed mutual funds aren’t sitting back: They are scrambling to launch new share classes with fee structures meant to help brokers comply with the fiduciary rule.