A top Department of Labor official involved in crafting Labor’s rule to amend the definition of fiduciary on retirement accounts said Thursday that while DOL is committed to fixing “demonstrable injuries” in how retirement advice is delivered to retail investors through its fiduciary rulemaking, the current redraft will be modified.
By moving forward with its redraft to amend the definition of fiduciary under the Employee Retirement Income Security Act, DOL has “identified what we believe are demonstrable injuries in the way advice is delivered to retirement investors,” Timothy Hauser, deputy assistant secretary for DOL’s Employee Benefits Security Administration, said during comments at a meeting held by the Securities and Exchange Commission’s Investor Advisory Committee.
“We are committed to doing something to fix that [retirement advice] problem, but we aren’t wedded to any particular choice of words or regulatory text,” Hauser added. “The point is to improve this market. We’ve gotten a lot of helpful comments along the way. There will be changes [to the redraft], no doubt about it.”
Hauser said that DOL’s redraft includes “both a revision to our basic definition of who a fiduciary is, but also [includes] a set of prohibited transaction rules to allow the compensation streams to move forward in a way that we think honors the statute’s intent to mitigate conflicts of interest.”
The comment period on the redraft ends July 21, with three to four days of hearings to be held on the redraft the week of Aug. 10. Hauser urged those who want to testify at the hearings to submit their applications.
The same day as the Investor Advisory Committee meeting, DOL received petitions from more than 230,000 signers supporting its fiduciary redraft. The signatures were gathered by CREDO Action, MoveOn.org, Americans for Financial Reform and Public Citizen.
Jerome Lombard, president of Janney Private Client Group, argued during the Investor Advisory Committee meeting held at SEC headquarters in Washington that DOL’s rule is “confusing, burdensome,” would likely eliminate investment advice for lower-income savers and result in “endless litigation.”