DOL Fiduciary News: November 13, 2017
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Borzi: Hard for Acosta to justify long DOL fiduciary rule delay
InvestmentNews; Nov 10, 2017 @ 5:25 pm
A former Obama administration official known as the architect of the Labor Department's fiduciary rule said Friday she doubts the agency's current leadership can justify the long implementation delay it is seeking.
Phyllis Borzi, former assistant labor secretary and head of the Employee Benefits Security Administration, guided the development of the regulation from the initial proposal in 2010 through the final rule released in April 2016. Ms. Borzi said she anticipated challenges to the rule and was particularly careful to ensure the agency made no procedural missteps in promulgating the regulation, which requires financial advisers to act in the best interests of their clients in retirement accounts.
That effort included showing evidence of a market failure, seeking public input, maintaining a fair and open rulemaking process, demonstrating that the recommended approach was reasonable, and providing strong policy, legal and economic analyses to support the rule.
She said current DOL Secretary Alexander Acosta is not likely to meet the same criteria for delaying the enforcement mechanisms of the rule.
"It will be very hard for the secretary of Labor to make these findings," Ms. Borzi said at a TD Ameritrade Institutional conference in Washington.
SEC Eyes Rule on Use of 'Advisor' Title, Promises More RIA Exams
Financial Advisor; November 10, 2017
The Securities and Exchange Commission (SEC) is back to looking at the titles that brokers and advisors use to describe their services to investors as part of its best practices regulation, Mark Fletcher, head of the SEC’s Office of the Investor Advocate, told attendees at TD Ameritrade’s Advocacy Leadership Summit in Washington, D.C., on Friday morning.
The focus is on when a financial professional should be able to call himself or herself an advisor, a title that implies a fiduciary relationship.
While Fletcher declined to confirm details of the regulation, he did say that he is working to ensure that the “cure isn’t worse than the disease,” and that regulatory changes don’t water down advisors’ fiduciary rule.
The SEC has taken up the issue of the titles that advisors and brokers present to investors in the past -- including the titles of broker, trusted advisor and financial planner – but Fletcher says he is confident this effort will be successful and should govern all practitioner verbal and written communications and advertising.
The regulatory path ahead, however, will not be without bumps. For instance, allowing brokers to weave in and out of fiduciary duties continues to be problematic, said Fletcher, a former state securities commissioner. “If I’m the client, does it really work if I pick up the phone and call you and you’re my fiduciary while we’re talking and when we hang up you’re not my fiduciary any more?” he said.