Labor's Alexander Acosta and SEC's Jay Clayton tell lawmakers they will work together on fiduciary rule

In separate appearances before Senate panels, the regulators stressed the cooperation that Republican legislators and opponents of the DOL fiduciary rule are demanding

Jun 27, 2017 @ 2:13 pm

By Mark Schoeff Jr.

Labor Secretary Alexander Acosta and Securities and Exchange Commission Chairman Jay Clayton told lawmakers on Tuesday that their agencies would work together on investment advice regulation.

In separate appearances before Senate panels, the two regulators stressed the cooperation that Republican legislators and opponents of the DOL fiduciary rule are demanding. Supporters of the rule, which was finalized last year by the Obama administration, maintain that the DOL did consult with the SEC while it was written.

"The SEC has important expertise and they need to be part of the conversation," Mr. Acosta said to the Senate Appropriations subcommittee on labor and health and human services. "It's my hope that as the SEC also receives a full complement of commissioners that the SEC will continue to work with the Department of Labor on this issue."

Mr. Clayton was sworn in as SEC chairman on May 4 but the normally five-person commission still has two vacancies. The Trump administration has not yet announced nominees.

Mr. Clayton said that the DOL rule, which was partially implemented earlier this month but is undergoing a review that may result in changes, would influence any advice regulation that the SEC might decide to pursue. Earlier this month, Mr. Clayton released a request for comment about fiduciary duty.

"It's not separate," Mr. Clayton said to the Senate Appropriations subcommittee on financial services. "It's my intent as chairman to try and move forward and effectively deal with that in a way that is coordinated so that our Main Street investors have access to investment advice and access to investment products...[and] at the same time very much fulfilling our investor-protection mission."

His language echoed that of financial industry opponents of the DOL rule, which would require financial advisers to act in the best interests of their clients in retirement accounts. The measure would mostly affect brokers, who currently operate on a suitability standard when selling investment products. Investment advisers must already meet a fiduciary standard.

Critics say that the DOL measure is too complex and costly and would force brokers to abandon clients with modest accounts. Supporters of the rule say that it is necessary to reduce brokers' conflicts of interest that result in the sale of inappropriate high-fee investments that erode savings.

The DOL's request for comment on the rule is undergoing a review at the Office of Management and Budget. When OMB approves the request, it will be released.


What do you think?

View comments

Recommended for you

Featured video

Gadget Girl

How Tamarac’s new platform will help advisers better engage with clients

Tamarac recently announced the launch of the Tamarac platform for Registered Investment Advisors. What can advisers expect from the completely redesigned platform?

Latest news & opinion

Nontraded REITs to post worst sales since 2002

The industry is on track to raise just $4.4 billion, well off the $19.6 billion it raised just four years ago, as new regulations hinder sales.

Broker protocol for recruiting a boon for clients

New research finds advisers whose firms have joined the agreement take better care of customers.

Meet our 2017 Women to Watch

Introducing 20 female financial advisers and industry executives who are distinguished leaders, advancing the business of providing advice through their creativity and hard work.

Raymond James executives call on industry to keep broker protocol

Also ask firms to pay for the administration of the protocol to 'ensure its longevity and relevance.'

Senate committee approves tax plan but full passage not assured

Several Republican senators expressed reservations about the bill, and the GOP cannot afford too many defections.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print