Acting SEC Chairman Rips DOL Fiduciary Rule
Acting SEC chairman Michael Piwowar had strong words about the Department of Labor’s fiduciary rule at the Investment Adviser Association Compliance Conference on Thursday.
“I have a very nuanced view of the DOL fiduciary duty rule. I think it is a terrible, horrible, no good, very bad rule,” said Piwowar. “For me that rule was never ever about investor protection. To me, that rule, it was about one thing and it was about enabling trial lawyers to increase profits.”
According to the DOL fiduciary rule, all who provide retirement investment advice to plans, plan fiduciaries and IRAs are required to abide by a more rigorous “fiduciary” standard.
His blasting of the regulation comes just days after the Department of Labor proposed a 60-day delay of the rule’s original implementation date of April 10th. The proposed delay would allow the agency to conduct a review of the rule as ordered by President Trump in a presidential memorandum issued in early February.
Opponents of the regulation share Piwowar’s view that the fiduciary rule will leave advisors vulnerable to expensive class action lawsuits on behalf of disgruntled investors, as well as the belief that the rule will result in added compliance expenses that will likely eliminate affordable investment advice for many low- and middle-income savers.
Those in favor believe the rule is necessary to protect retirement savers from conflicted investment advice given by advisors that receive high commissions for the products they recommend.
