NOW Trump is Taking on the DOL Fiduciary Regulation

[scagnt83]

As I thought before (but never had time to actually find links verifying), the previous "stand down" order on excessive regulations did not include the DOL Fiduciary Reg. However, now he is taking some action on it today.

"The action on the conflict-of-interest regulation — known as the fiduciary rule — will take the form of a “presidential memo” that will direct the Labor Department to cease implementation of the measure and “completely review” it, the official said."

"The official said the administration considers the rule misguided and suggested it might have exceeded the Labor Department’s statutory authority."

Trump plots overhaul of financial market rules - POLITICO


This does not do away with it. But at least it will now be on hold and reviewed by different eyes. He is also having Dodd-Frank reviewed with this executive "memo".

 

[SusieQ2]

I like the liberal press take on this. "Put in place by Obama and it requires retirement advisers to work in the best interests of their clients."

Like this was a magical regulation that makes everyone honest.

Maybe if politicians would have put the American people's best interest ahead of their own we wouldn't be in the mess we're in.

 

[scagnt83]

I like the liberal press take on this. "Put in place by Obama and it requires retirement advisers to work in the best interests of their clients."

Like this was a magical regulation that makes everyone honest.

Maybe if politicians would have put the American people's best interest ahead of their own we wouldn't be in the mess we're in.

Good point. It has been termed the "best interest" rule... in reality, it is the "you now need a half million minimum for professional IRA advice" rule. Or it could also be called the "you arent smart enough to make your own IRA investment decisions" rule. Those are much more accurate. Maddoff was a Fiduciary if I remember correctly.... you cant regulate away twisted ethics.

----------

Here is a rational take on it:

Retirement: Rule to protect accounts was misintended says Gary Cohn

 

[Brian Anderson]

I think after "review" it's going to go away in its present form. Will all the months of work by IMOs/BGAs/advisors/carriers to prepare for it end up being a giant waste of time and money? I imagine all those "financial institution" status hoops the big IMOs were going through can stop now as well.

Or perhaps all this might prove at least somewhat useful if after this "delay" and "review" the SEC ends up getting its crack at rewriting the Fiduciary Rule (and hopefully finds ways to avoid the big problems with the DOL version).

 

[scagnt83]

I actually agree that the pending regs are an overreach by the DOL. I do understand the DOLs argument, and agree from a technical standpoint. However, for years now, the DOL has stuck to employer sponsored retirement plans and have allowed FINRA/SEC/States to regulate at the individual level.

Suddenly out of the blue, the DOL wants to layer on new regulations in an industry that is already being regulated by 3 different entities.

The DOL has very little experience regulating at the individual level. The restrictive and exclusionary way it was written made it clear the writers have very little experience with the needs of individual investors, especially ones without large sums of money to invest.

Technically per law, yes, the DOL can do this. But can and should are very different things. There are so many existing regulations that could be strengthened and improved upon... or actually enforced. It makes little sense (other than political theatrics) to use a chainsaw when you can use a scalpel.

 

[Brian Anderson]

As this is breaking today, here is a link to Bloomberg's coverage if interested, and below that the just-released statement of support from the Insured Retirement Institute:

https://www.bloomberg.com/politics/articles/2017-02-03/trump-to-halt-obama-fiduciary-rule-order-review-of-dodd-frank

IRI Applauds Presidential Action Delaying 
DOL Fiduciary Rule
President Trump Directs DOL to Determine Whether Rule Will Harm Investors

WASHINGTON, D.C. – The Insured Retirement Institute (IRI) today released the following statement from IRI President and CEO Cathy Weatherford after President Donald J. Trump sent a memorandum to Acting Secretary of Labor Edward Hugler directing him to delay the applicability date of the Department of Labor’s Fiduciary Rule, undertake a new economic and legal analysis to assess whether the rule is likely to harm consumers, and rescind or revise the rule if it is found to be inconsistent with the Administration’s policy:

“The Insured Retirement Institute strongly supports President Trump’s decision to delay implementation of the Department of Labor’s Fiduciary Rule and initiate a thoughtful and comprehensive review of the rule’s likely impact on retirement savers.

“IRI and our members have long supported a best interest standard of care for financial professionals, and have already taken extensive steps to move in that direction.

“We continue to have significant concerns about the rule and its harmful impact on retirement savers. The rule makes sweeping changes to the existing regulatory framework that will ultimately make it harder for savers to plan for retirement by depriving them of access to affordable holistic financial advice and a wide range of investment options. These concerns, which drove us to pursue our pending legal challenge to the rule, are further exacerbated by the overly aggressive compliance deadline provided by the DOL.

“We applaud the President’s leadership in calling for the DOL to put the rule on hold to give policymakers time to reevaluate the rule in order to protect consumers from these negative consequences. We look forward to working with President Trump’s administration and Congress to develop policies that will ensure all Americans have access to the advice and products they need to achieve a secure retirement.”

 

[DHK]

The two things I didn't like about the DOL ruling:

1) Commission disclosure (separate from costs, terms, fees, conditions, surrender charge periods, etc.) What an insurance company pays me is not the client's business... period. (To quote Sean Spicer.)

2) BICE requiring a financial institution to sign off on the fiduciary standard. This was what makes it 'unworkable' for those in the fixed indexed annuity marketplace.

Hopefully this nightmare will go away, or they'll make it workable for the independent life agent.

 

[walthamny]

This is a big win for the indexed annuity business, I am not sure if this is a win for the Permanent Life Insurance business, now they will have somewhat more competition from indexed annuity folks. It is actually a loss for the financial guys who only sell mutual funds and asset management. And Robo asset managers will get hurt as their business was already slowing down. Lets see if Trump keeps his campaign promise and decides to tax growth of cash value in life insurance. This was an easier regulation to kill because it ended up being far too long. Also it was stupid to have different standards for IRA accounts and brokerage accounts. Liberal regulators have to get away with this disclosure illness. Clients don't read or understand disclosures. And most account openings in the future will be done electronically, frankly, who cares you have another 25 pages of disclosures, clients will check off just like I check off whenever I update my windows software every few years.

It would not surprise me if California or NY decide to copy the DOl rule and have it applied in their states only with some revisions. So instead of having one complicated and long set of rules, we could end up with multiple different, complicated and state specific unique rules.

 

[DHK]

https://www.whitehouse.gov/the-pres...-trump-signing-executive-order-fiduciary-rule

 

[Tahoe Ray]

Final Trump memo lacks explicit directive to delay DOL fiduciary rule