DOL proposes 60-day delay to fiduciary rule

In a February 7 letter to Hugler, in which she compiled two dozen financial institutions' expressions of readiness for the implementation of the Fiduciary Rule, as well as their endorsements of the measure, Warren inveighed against the rule's removal. But under the proposal, which will be officially published Thursday, the rule would not take full effect until June 9.

The Labor Department is now running without a leader.

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The delay and possible demise of the fiduciary rule comes after the regulation survived several court challenges, including a lawsuit brought by some industry trade groups. The Department of Labor created the rule without a clear understanding of the annuity marketplace and consumers will be more confused then ever unless we clean up the requirements in this rule. That decision is now being appealed by the U.S. Chamber of Commerce and other business groups that oppose the regulation.

We ask you to notify the Trump Administration and state your support of the delay so we can make this rule work for consumers. Advocates say the rule can help retirement savers by making it more hard for brokers to recommend investments that are expensive or complicated. That is how fiduciaries are obligated to act.

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Opponents of the rule argue it can have the unintended effect of making it harder for some firms to work with savers who have small account balances, which are less profitable.

Under the suitability standard, advisors can pick products that are most remunerative to them even if they erode an investors' optimal returns. Merrill Lynch, for example, recently indicated that it could walk back aspects of its implementation strategy, including a pledge to cease offering commission-based retirement accounts.

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ABA has long advocated for changes to the fiduciary rule, as well as a longer implementation period to allow banks of all sizes time to comply. Instead, the Trump-lead DOL "will accept public comments on the proposed extension for 15 days following its publication". After reviewing those comments, the department is expected to issue a final rule making the delay official.

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