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September 28, 2015 at 07:20 AM
During the FPA BE national conference in Boston, the lead advocacy officials for both the Financial Planning Association and the Certified Financial Planner Board of Standards said in separate interviews that they expect the Department of Labor to propose this fall its final rule on the definition of fiduciary under ERISA. However, Karen Nystrom of FPA and Marilyn Mohrman-Gillis of the CFP Board said the picture for Securities and Exchange Commission action on a fiduciary ruling under Section 913 of the Dodd-Frank Act is far from clear as to when, or even whether, the Commission will act.
On Sunday during an FPA leadership media briefing, Nystrom, the FPA’s director of advocacy, said the Department of Labor rulemaking would be settled before the SEC takes any further moves toward a fiduciary standard for all advice-givers, though it’s likely that any SEC rule will be “informed” by the DOL rule. Nystrom said she expected DOL to issue a revised rule by the “end of the year,” but it’s unclear when that rule would take effect.
On Saturday during a media briefing with the CFP Board leadership, Mohrman-Gillis, the Board’s managing director of public policy and communications, said she expects a final rulemaking from the DOL in the first half of 2016. She considers it unlikely, she said, that Congress would make any specific moves to stop implementation of the DOL rule, unless it came in the form of a rider to a broader spending plan, though she suggested that might not be in the cards either. The long process for the DOL rule, and the openness of the Department to suggestions from the financial services industry for changes, leads her to believe that the final DOL rule, regardless of its exact shape, will be implemented next year. However, the departure of two SEC commissioners may well have an effect on the fiduciary rulemaking at the SEC as well, she said.
Separately, Nystrom said she expects it will be “difficult” for the SEC “to get to a fiduciary” rulemaking without two new commissioners.
