Labor Secretary Acosta: Concerns with DOL fiduciary rule 'not heard' during original rulemaking

A request for information sent yesterday to the Office of Management and Budget is the first step in reviewing the rule, Mr. Acosta said. <b>Plus, <a href=&quot;http://www.investmentnews.com/article/20170607/FREE/170609954/investment-adviser-association-members-take-complaints-about-dol&quot; style=&quot;color:#b10816&quot; target=&quot;_blank&quot;>Investment Adviser Association members take complaints about DOL rule to Capitol Hill</a>.</b>
JUN 07, 2017

Secretary of Labor Alexander Acosta hinted Wednesday that the Obama administration didn't adequately consider "concerns" raised during the rulemaking process surrounding the Department of Labor's fiduciary rule. Mr. Acosta made the remark during congressional testimony, after Rep. Steve Womack (R-Arkansas) asked: "Is it not obvious that [the fiduciary rule] is going to limit [investors'] options? Does it have some far-reaching effects that would be counterproductive to particularly younger generations' savings opportunities?" The argument that the regulation will reduce access to investment options is common among critics of the regulation, which will raise investment-advice standards in retirement accounts once its phased implementation period begins June 9. "There are concerns. Those concerns were voiced in the original rulemaking process, and the prior administration made a decision that those concerns were outweighed by what the prior administration wanted to do," Mr. Acosta said in response. "Those concerns certainly surfaced the first time around, and unfortunately they were not heard. And that's what happens," Mr. Acosta added. The secretary made his comments during a hearing before the U.S. House of Representatives' Subcommittee on Labor, Health and Human Services, Education, and Related Agencies regarding the DOL's budget. The DOL under Mr. Acosta is currently conducting a review of the fiduciary rule, as directed earlier this year by the Trump administration. The DOL has sent a request for information to the Office of Management and Budget, which received the request on Tuesday and will issue it publicly after completing a review. The request for information will seek response from industry stakeholders and consumers about the fiduciary rule and how it's being implemented, and is "the first step in the administration's review of that rule," Mr. Acosta said. "We need that information and we need that data in order to decide how to proceed," he added. Micah Hauptman, financial services counsel at the Consumer Federation of America, believes Mr. Acosta is incorrect in saying the Obama administration's Labor Department didn't effectively consider the concerns of rule opponents during the rulemaking process. The previous DOL "carefully scrutinized" these arguments and "rightly determined they were meritless and self-serving," he said. "The industry opponents' sky-is-falling claims have become even less credible as firms have implemented the rule and made statements confirming that it will benefit investors," Mr. Hauptman said.

Latest News

Cetera names Richard Vogel to lead Cetera Advisors community
Cetera names Richard Vogel to lead Cetera Advisors community

The giant broker dealer and RIA overseeing roughly $800 billion in AUM and AUA has appointed a Merrill and BofA alum to support advisor growth.

Robinhood in talks with regulators over tokenized US equities
Robinhood in talks with regulators over tokenized US equities

Firm's CEO is confident SEC can approve without legislation.

Five-person Raymond James team jumps to Janney in Maryland
Five-person Raymond James team jumps to Janney in Maryland

The group led by a 37-year industry veteran brings $470 million in assets to the Philadelphia-based broker dealer.

$20B Merit looks to next phase as Constellation takes minority stake
$20B Merit looks to next phase as Constellation takes minority stake

The Atlanta, Georgia-based national wealth firm revealed its new PE partner as prior backers Wealth Partners Capital Group and HGGC's Aspire Holdings exited their investments.

$350M father-son duo hops from Osaic to Equitable Advisors
$350M father-son duo hops from Osaic to Equitable Advisors

The latest departures in Ohio mark another setback for the hybrid RIA, which is looking to "expanding its presence across all models and segments of the wealth management industry."

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.