Secretary of the Commonwealth William Galvin, the securities regulator in Massachusetts, has condemned a ruling by the Fifth Circuit U.S. Court of Appeals striking down the Department of Labor’s fiduciary rule and encouraged the federal government to appeal the ruling.
The fiduciary rule seeks to eliminate conflicted retirement advice and is currently under review as ordered by President Trump. The rule, which was created under the Obama Administration, mandates that all financial professionals who work with retirement plans or provide retirement planning advice act as fiduciaries.
“I strongly urge the federal government to appeal this ruling, to provide certainty to customers and their advisers,” Galvin said.
“In the meantime, my office will continue to pursue our cases against Scottrade, which involves violations of their own internal policies and my office retains the authority to pursue investigations involving dishonest and unethical practices,” Galvin continued. “We will continue to work all other investigations, including Wells Fargo, aggressively to assure that retirees are provided with retirement advice free of conflict.”
Earlier this month, Galvin, an outspoken fiduciary rule supporter, opened an investigation into Wells Fargo Advisors over inappropriate referrals of brokerage customers to managed and advisory accounts, unsuitable recommendations of alternative investments, as well as unsuitable referrals and recommendations in connection with 401(k) rollovers.
And last month, Massachusetts regulators charged broker-dealer Scottrade Inc. with dishonest and unethical activity over fiduciary rule violations stemming from two sales contests which included retirement assets.