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DOL Fiduciary News: May 3, 2017

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Obama’s Legacy: A Retirement Rule That Is Tough to Kill

The Wall Street Journal; May 3, 2017 7:00 a.m. ET

Opponents of a landmark retirement-savings regulation cheered President Donald Trump’s election as their chance to kill the rule, or at the very least defang it. But three months into the new administration, it is proving tough to quash.

It’s not for lack of trying. Shortly after his inauguration, Mr. Trump ordered the Labor Department to review the “fiduciary” rule’s economic impact on retirement savers and the financial-services industry, with an eye toward revising or rescinding it. The department is in the midst of that process, a spokeswoman said, with both career civil servants and political appointees cooperating to comply with the president’s memorandum.

Yet people on both sides of the debate say the rule, which requires stewards of tax-advantaged retirement savings to act in clients’ best interests rather than their own, may survive both a 60-day delay in the compliance deadline and the regulatory review process relatively unscathed

2 ways for advisers to prepare for fiduciary implementation

Financial Planning; May 02 2017, 1:04pm EDT

SAN DIEGO -- Some advisers may have breathed a sigh of relief when the fiduciary rule was delayed, but ERISA attorney Fred Reish warns against letting this extra grace period go to waste.

"On June 9, the fiduciary rule — lock, stock and barrel — comes into play," Reish said at IMCA's 2017 Annual Conference Experience in San Diego.

Although to the Department of Labor delayed the regulation by 60 days, Reish says provisions that would have blocked it from implementation were left out of the latest federal budget deal.

"I think the rule will go through as it is now," he says. "There may be some changes, but it won't be significantly different."

After his confirmation as SEC chairman, Jay Clayton is urged to tackle fiduciary standard

InvestmentNews; May 2, 2017 @ 5:48 pm

The Senate on Tuesday evening confirmed Jay Clayton as chairman of the Securities and Exchange Commission, and financial services groups wasted little time in urging him to pursue a uniform fiduciary standard.

In a statement following his confirmation, the Financial Services Institute, which primarily represents independent broker-dealers, urged Mr. Clayton to pursue a uniform fiduciary standard rule.

"Adopting a true, uniform fiduciary duty that protects investors and their access to affordable, objective financial advice must finally be given the serious attention it deserves," FSI executive vice president and general counsel David Bellaire said in a statement.

Morgan Stanley case shows state enforcing fiduciary duty; red flag for sales contests

Reuters; Tue May 2, 2017 | 2:54pm EDT

NEW YORK (Thomson Reuters Regulatory Intelligence) -- While a national fiduciary rule for retirement accounts has been put on hold in Washington, a civil enforcement action by Massachusetts against Morgan Stanley shows a state regulator moving ahead in enforcing fiduciary duty. The state alleged that the brokerage ignored a fiduciary responsibility by offering cash bonuses for account openings.

The case illustrates not only the growing regulatory risk coming from states, but also highlights the need for firms to look at sales incentives to see if they aligned with consumers. The risk of alienating clients with such programs is high.

Some see consumer cases playing to the strength of state regulators. State agencies have experience and expertise in the field that can rival U.S. securities and banking agencies. While federal authorities are best at market manipulation and systemic threats, state regulators are “complaint-driven.”

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