Members of Donald Trump's DOL landing team oppose fiduciary rule

While the president-elect's pick to head DOL hasn't said anything about the rule, others on the team have objected to it

Dec 14, 2016 @ 1:23 pm

By Mark Schoeff Jr.

Andrew Puzder, CEO of CKE Restaurants Inc. and President-elect Donald Trump's choice for secretary of labor
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Andrew Puzder, CEO of CKE Restaurants Inc. and President-elect Donald Trump's choice for secretary of labor (Bloomberg)

Although President-elect Donald Trump's nominee for secretary of labor may be a blank slate when it comes to the agency's investment-advice rule, members of the transition team for the agency have made their opposition clear.

Mr. Trump's choice to head DOL, Andrew Puzder, has dealt mostly with wage-and-hour issues as chief executive of the fast-food company that owns the Hardee's and Carl's Jr. hamburger chains.

He has opposed DOL overtime rules and resisted minimum wage hikes but hasn't said anything about the DOL fiduciary rule, which would require financial advisers to retirement accounts to act in their clients' best interests.

But some of the people who have been tapped by Mr. Trump for the DOL landing team, which is tasked with gathering information about DOL policies and preparing it for the arrival of Mr. Trump's appointees, are opponents of the rule.

One of the landing team members, Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute, wrote in a Dec. 8 blog post on MarketWatch that the DOL rule is a “power grab” and an “attempt to regulate small brokerages and insurance agents.”

She went on to assert that the rule would force advisers to drop commission-based products and charge fees on assets, pricing investors with modest assets out of the advice market.

Another DOL landing team member, Nathan Mehrens, general counsel at Americans for Limited Government, wrote in a May 16 post on the Investor's Business Daily website that “the regulation is so complex that the department took 395 pages just to describe its impact.”

The rule was an effort by DOL to drive savers away from financial advisers and toward government-sponsored plans, he wrote.

Another landing team member from the same think tank last year called on Congress to include in a spending bill a rider to prevent the DOL from funding the rule.

“[President Barack] Obama is trying to drive out small investors in favor of the Wall Street bigwigs,” Rick Manning, president of Americans for Limited Government, wrote in a Dec. 8, 2015, op-ed in The Hill, a Capitol Hill newspaper.

The Obama administration was able to keep congressional Democrats in line to oppose the rider, arguing that the DOL rule is necessary to protect workers and retirees from conflicted advice that leads to inappropriate high-fee investment products that erode savings.

In addition to Ms. Furtchgott-Roth, and Messrs. Mehrens and Manning, the DOL landing team includes F. Vincent Vernuccio, director of labor policy at the Mackinac Center for Public Policy, and Loren Smith, an analyst at Capital Alpha Partners.

Each team member previously worked in the George W. Bush administration Labor Department. None of them could be reached for comment.

Initial implementation of the DOL rule is scheduled to begin in April, and the Trump administration faces obstacles in getting rid of it.

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