The Department of Labor has removed from its website a consumer-oriented document related to the agency's fiduciary rule.
The document was in the form of answers to frequently asked questions called "Consumer Protections for Retirement Investors – FAQs on Your Rights and Financial Advisers."
The FAQs,
issued on Jan. 13, provide numerous questions for investors to pursue with their advisers based on the requirements of the DOL fiduciary rule, which raises investment-advice standards in retirement accounts.
The FAQs encourage investors to press their advisers about whether they are fiduciaries, how much they charge for their advice and whether they get paid more based on the investments they recommend.
(The FAQs are still viewable through websites that, at the time, saved and re-published the document. They can be viewed
here.)
The Obama administration pursued its fiduciary rulemaking because it believed consumers need protection from conflicted investment advice, which it estimated costs investors $17 billion per year due to high fees.
Two other sets of separately-issued FAQS meant for industry practitioners — one on the rule's prohibited transaction exemptions and the other on technical questions raised by financial service providers — are
still viewable by the public on the DOL website.
A DOL spokesman didn't return messages seeking comment on why the agency removed the consumer FAQs, or when it occurred.
Charles Humphrey, principal at an eponymous law firm and a former attorney at the DOL and
Internal Revenue Service, said a contact at the DOL confirmed the agency had taken down the FAQs but didn't explain why.
The fiduciary rule's implementation date is scheduled to begin April 10, but the Trump administration, which took over on Jan. 20, is
currently seeking a delay in the start date.
Mr. Trump previously ordered the DOL to
conduct a review of the rule, and assess whether it would limit investors' access to investment products or advice, cause disruptions in the industry and increase litigation against financial firms, all of which factor into opponents' arguments against the measure.
Douglas Dahl, an employee benefits attorneys at the law firm Bass, Berry & Sims, believes it's "hard to know" exactly what the FAQ removal means, but said removing this sort of "informal guidance" doesn't have to go through a stringent regulatory process similar to a sought-after delay in the fiduciary rule.
Mr. Humphrey agreed.
"They're free to put that guidance up and take it down any time they want," he said.
Mr. Humphrey viewed the consumer FAQs as a last-ditch effort by former assistant secretary of labor Phyllis Borzi, the rule's primary champion and architect, to make a case for the rule just days before Mr. Trump took office.
While Mr. Trump hadn't, at the time, yet vocalized his feelings about the rule, at least one adviser
expressed vehement opposition to the regulation.
"I think it was a strongly-worded defense of what they were doing with the rule, and sort of a last advisory to retirement investors that they do have these rights, and correspondingly have an obligation to ask how their advisers are being paid," Mr. Humphrey said.
