New DOL, SEC officials help advance fiduciary rule work

Senate confirms Preston Rutledge to key Labor Department role, while Hester Peirce and Robert Jackson Jr. join SEC as commissioners

Dec 22, 2017 @ 1:48 pm

By Mark Schoeff Jr.

Three new officials — one at the Labor Department and two at the Securities and Exchange Commission — will help the agencies advance their work on investment advice standards.

Before leaving Washington for its holiday break on Thursday, the Senate confirmed by voice vote Preston Rutledge to be assistant secretary of labor and Hester Peirce and Robert Jackson Jr. to be SEC commissioners.

Mr. Rutledge, mostly recently a senior counsel on the Senate Finance Committee, will head the Employee Benefits Security Administration. He will be the DOL official with the most direct impact on the agency's fiduciary rule, which has been delayed and is undergoing a re-assessment under a directive from President Donald J. Trump.

The EBSA chief in the Obama administration, Phyllis Borzi, was the architect of the fiduciary rule, which requires brokers to act in the best interests of their clients in retirement accounts.

The arrival of Mr. Rutledge means that there is now a point person on fiduciary as the agency considers changes to the rule.

"This is a great Christmas present," said Bradford Campbell, a partner at Drinker Biddle & Reath and the EBSA director during the George W. Bush administration. "We finally have the political and substantive leadership we need at EBSA."

Lee Covington, senior vice president and general counsel at the Insured Retirement Institute, said that Mr. Rutledge is "committed to making sure that the president's directive is carried out" and understands "the harmful impact the DOL rule is already having on Americans' ability to...achieve a financially secure and dignified retirement."

With Mr. Rutledge in place, there will now be an administration official who is the focal point of the debate rather than DOL staffers.

"Having a Trump-appointee be the standard-bearer for whatever the Department of Labor ends up putting out...would be useful in moving the conversation back to substance and off of politics," said Barbara Roper, director of investor protection at the Consumer Federation of America.

Meanwhile, the SEC plans to propose its own investment-advice regulation next year.

Having Ms. Peirce, most recently a fellow at the conservative Mercatus Center at George Mason University, and Mr. Jackson, a Columbia University law professor, on board gives the agency its normal five-member roster for the first time in two years.

"The ability to have a robust dialogue on all the different, complicated aspects of fiduciary with a full complement of commissioners will enable the commission to produce a thoughtful proposal that raises all of the relevant questions for comment," said Karen Barr, president and chief executive of the Investment Adviser Association.

The SEC has been stymied for years on a fiduciary rule because of disagreements between commissioners. Generally, the Republican members have opposed a regulation, and the Democrats have supported one.

That division is likely to remain under the Republican Ms. Peirce, who has expressed skepticism of a fiduciary rule, and Mr. Jackson, a Democrat, who does not have a track record on the topic but is likely to align with Democratic proponents.

It will be up to SEC Chairman Jay Clayton to bring the five members together or decide to proceed on a split vote.

"Chairman Clayton understands how to forge consensus," Ms. Barr said. "He's going to be able to work with the commissioners to at least release a proposal."

No matter where the deliberations lead at the DOL and SEC, the agencies will now be better able to move ahead.

"This is a large step in being able to organize the process," said Joshua Lichtenstein, a partner at the law firm Ropes & Gray.


What do you think?

View comments

Recommended for you

Upcoming Event

Nov 13


Best Practices Workshop

For the sixth year, InvestmentNews will host the Best Practices Workshop & Awards, bringing together the industry’s top-performing and most influential firms in one room for a full-day. This exclusive workshop and awards program for the... Learn more

Featured video


What's behind the TCA, ETrade deal?

Deputy editor Bob Hordt talks with senior columnist Jeff Benjamin about what each party in the recent acquisition stands to gain by joining forces.

Latest news & opinion

HighTower on prowl for new CEO, Weissbluth to become chairman

Move is latest in Chicago-based RIA consolidator's effort to expand senior leadership team.

What's in a name? For TCA by ETrade, everything

Trust Company of America is gone, and there's big buzz over the name change. But turning the custodian into an industry powerhouse will take a lot longer — if it happens at all.

When it comes to regulating AI in financial services, murky waters are ahead

Laws are unclear on how the technology fits in with compliance.

As Ameriprise case shows, firms on hook when brokers go bad ​

The SEC will collect $4.5 million from the brokerage firm for failing to supervise brokers who were ripping off clients.

10 highest paid professions in America today

These are the top-paying jobs in the U.S., according to Glassdoor.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print