FSI takes DOL's Borzi to the mat

Jul 15, 2012 @ 12:01 am

By Darla Mercado

The Financial Services Institute Inc. fired off an angry note to two members of Congress last Tuesday, fuming about the Labor Department's requests for reams of IRA data for its soon-to-be-released fiduciary regulation.

The e-mail, written by FSI chief executive Dale E. Brown, was sent to John Kline, R-Minn., chairman of the House Education and the Workforce Committee, and George Miller, D.-Calif., ranking member of that committee.

“We were surprised at Assistant Secretary Borzi's letter expressing disappointment in light of the facts surrounding the data request because her depiction of events stands in stark contrast to the facts,” Mr. Brown wrote.

In his note, he referred to a June 20 letter that Assistant Labor Secretary Phyllis Borzi, who heads the Employee Benefits Security Administration, sent to the congressmen.


In the letter, she updated the lawmakers on the agency's progress on re-proposing a regulation that would broaden the definition of “fiduciary.” Ms. Borzi also reviewed the Labor Department's requests for individual retirement account data from the financial services industry late last December.

She mentioned that the Labor Department “was disappointed not to receive many of the suggested data elements from industry sources” but that DOL officials had met with industry representatives and asked them to provide “whatever information they had that would be useful to our efforts.”

But in his latest letter, Mr. Brown insisted that the Labor Department gave the group 30 days to provide “detailed data on every investment, every investor and every recommendation in every context for the last 10 years.”

“Neither broker-dealers nor investment advisers are required to maintain 10-year records of customer investment histories,” he wrote.

Still, after meeting with the Labor Department staff Jan. 27, the FSI passed along its broker-dealer financial performance studies, spanning from 2009 to 2011, according to Mr. Brown's letter.

Labor Department spokesman Jason Surbey declined to comment.

dmercado@investmentnews.com Twitter: @darla_mercado


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