Trump call for DOL fiduciary rule review could open door to uniform standard

Brokerage business foes say they want a better rule; others call that a ruse

Feb 9, 2017 @ 2:28 pm

By InvestmentNews

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President Donald J. Trump's memo last week ordering the Labor Department to review the fiduciary rule has encouraged some in the brokerage business that an all-encompassing best-interest rule covering not just retirement assets could be crafted by the Securities and Exchange Commission.

The Wall Street Journal reports that UBS Group AG, which has more than 7,000 brokers in the U.S., last week said it welcomed Mr. Trump's action and said it wants a “single fiduciary standard that preserves client choice with the SEC taking the lead regulatory role.”

LPL Financial Holdings Inc., which serves more than 14,000 independent brokers, repeated its contention that a best-interest standard is appropriate for the industry and that a consistent approach to disclosures, compensation and mitigation of conflicts is the “right path forward.”

The Securities Industry and Financial Markets Association, which filed a lawsuit against the fiduciary rule that was shot down earlier this week by a federal judge in Texas, said it supports a best-interest standard but believes the Labor Department isn't “the right agency” to craft it.

But the article notes that the SEC, the agency most likely to design and champion such a rule, had been unable to craft one under President Barack Obama, “and prospects don't appear any better under a Trump administration.”

Barbara Roper of the Consumer Federation of America and a long-time critic of Wall Street and its opposition to the rule, is quoted as saying that the SEC's record on crafting a fiduciary rule is abysmal. Firms touting their support for an SEC standard, she said, “is just their way of killing the fiduciary rule without looking like villains.”

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