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Labor Department calls to delay major rule about retirement advice

04 March 2017

The DOL is proposing a 60-day delay of its fiduciary rule, reports ThinkAdvisor.

Advisers should abide by a "best-interest" standard for their clients, Financial Services Roundtable Chief Executive Tim Pawlenty said in a statement Wednesday, but "such a requirement should be implemented without miles of bureaucratic red tape".

The Labor Department's proposed delay, which is scheduled to be published in the register on Friday, outlines a comment period of 15 days in which the public can ask questions about the department's intent as well as Trump's memo.

"There are approximately 45 days until the applicability date...and the Department believes it may take more time than that to complete the examination mandated by the President's Memorandum", wrote Timothy Hauser, the deputy assistant secretary of the DOL's Employee Benefits Security unit who signed the 31-page rule delay proposal. Instead of starting April 10, the rule would be delayed until June 9. "I find it very hard to see how the Department could justify a delay", said Barbara Roper, director of investor protection at the Consumer Federation of America.

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The Labor Department is now running without a leader. "Frankly, delaying implementation of this rule would be a slap in the face to the companies that have invested, in good faith, for a deadline that has stood for the past year-and to the everyday worker deserving of the assurance that their retirement adviser is working in their best interest". Advocates say the rule can help retirement savers by making it more hard for brokers to recommend investments that are expensive or complicated.

Kenneth Bentsen, SIFMA president and CEO, said, "The delay will allow the new administration an opportunity to review the rule's impact on investors and the market, while providing firms additional time to prepare for potential changes to the rule".

Former President Barack Obama and other Democrats saw the rule as vital to keep some advisers from gaining kickbacks from financial products that came with high fees and cost investors billions, according to the Obama administration.

Labor Department calls to delay major rule about retirement advice