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Member, Beacon International Group, Ltd.
The Department of Labor’s final conflict-of-interest rule is scheduled to be released April 6. While Department of Labor officials declined to comment, some critics are weighing in.
House Speaker Paul Ryan, R-Wis., tweeted Friday that the final rule “is Obamacare for financial planning.” Mr. Ryan promised congressional action to hold up the rule, which he said will make it harder for some people to get financial advice.
The rule applying fiduciary standards to anyone giving retirement investment advice is expected to have an effective date eight months from when it is issued. Timothy Hauser, deputy assistant secretary of labor for program operations, has said the initial focus will be on compliance assistance, and that the rule was carefully written to not limit retirement plan participants’ access to education. Still, he told Pensions & Investments in an earlier interview, “It’s going to be a big adjustment.”
Bing Waldert, managing director of Cerulli Associates, likens it to the Department of Labor’s mandatory fee disclosure rules for retirement plan service providers, which eventually brought about changes including some industry consolidation and interest in lower-cost products. “One can argue that these are things to the benefit of the consumer. Sponsors are looking to benchmark costs and bring down costs to the consumer. The defined contribution industry to a certain extent is in better health today. Over time, there is adaption, and innovation will happen,” Mr. Waldert said in an interview.
Hazel Bradford writes for Pensions & Investments, a sister publication of Business Insurance.
The Department of Labor would have to stop its efforts to update a fiduciary rule and let the Securities and Exchange Commission act first under a bill passed by the House of Representatives late Tuesday.