One source notes that the Department of Labor is moving full steam
ahead with a proposed fiduciary standard for anyone giving retirement investment
advice. As the Wall Street Journal notes, at present,
brokers’ recommendations only have to be “suitable.”
The proposed rule would require
financial advisers dealing with retirement savings to do so in their clients'
best interests and disclose any potential conflicts of interest. It also calls
for several prohibited transaction exemptions that would allow retirement
advisers and service providers to continue arrangements like revenue sharing
and fees.
The
rules come as individuals have become increasingly responsible for their own
retirement security as traditional pensions have mostly disappeared in favor of
IRAs and 401(k)s. Such products either didn’t exist or were brand new when the
department wrote its rules for retirement advice 40 years ago but now contain
about $11 trillion in assets.
Labor
Secretary Tom Perez notes that the rule is “intended to provide guardrails but
not straitjackets, so we know consumers are getting advice that is in their
best interest.
The DOL sent its proposed rule to
the Office of Management and Budget for regulatory review on Feb. 23, which
typically can take up to 90 days. The proposed rule is now being released for a
75-day public comment period, followed by a public hearing and further public
commentary.
