On March 2 the Department of Labor published a proposed rule to delay for 60 days the implementation of its fiduciary rule. Woodstock has written frequently on this essential rule (see most recently our article on February 9, 2017), which requires investment advisors to put first the interests of customers rather than provide conflicted advice to make bigger commissions and profits for advisors. If the rule becomes effective, it will provide a crucial safeguard for the millions of Americans who put their trust in investment advisers as they save for retirement.
The rule was finalized on April 16, 2016, and is scheduled to take effect on April 10, 2017. But the Trump administration has been trying to roll back and potentially eliminate this important rule. Its latest effort is the March 2 proposal from DOL, which seeks comment on delaying the implementation of the rule until June 9. Comments are due by March 17.
Woodstock’s position is that there is no legitimate basis for DOL to delay the rule. Excess fees on retirement accounts are costing workers $17 billion a year. The DOL took six years and employed numerous economists in demonstrating the tremendous benefits of the rule to individual investors, retirement plan sponsors, and the US economy as a whole. A 60-day delay will only perpetuate a status quo that is eroding workers’ retirement savings and give the DOL more time to invent arguments to gut the rule that the DOL itself has already clearly expressed is beneficial to American savers and workers. The proposed delay also unfairly punishes and undermines responsible advisors who have adjusted their business models and invested resources so they can comply with the rule by April 10.
Opponents of the rule, including the U.S. Chamber of Commerce, have already tried to delay the rule’s effective date by filing several court cases. But they have had no success because every court asked to delay the rule has found that the harm to the public that would be caused by a delay is bigger than any benefit advisors would get from one.
Now the DOL is trying to accomplish what no court would do – delay and potentially repeal the fiduciary rule that protects American workers and saves them billions of dollars every year in unnecessary and inflated fees. Comments are due by March 17. The link to the Federal Register webpage where you can provide your comment in opposition to this proposed rule is below:
A sample letter that you may use to comment on the rule is provided below. Sending an individual letter is a valuable way to show your opposition. If you would prefer, you can also sign on to the Woodstock letter by emailing your name, organization, title and phone number to firstname.lastname@example.org.
Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-5655
U.S. Department of Labor
200 Constitution Avenue NW.
Washington, DC 20210
Attention: Fiduciary Rule Examination, RIN 1210-AB79
To Whom It May Concern:
I am writing to express my support for the immediate implementation of the Department of Labor’s Fiduciary Duty Rule. The proposed rule has been the culmination of six years of careful research and consideration by many parties. Failing to implement the rule costs American workers $17 billion each year in excessive fees according to the White House Council of Economic Advisers; money that is steered away from necessary retirement savings.
[Here is a good place to add a paragraph reflecting a specific story or experience that highlights the need for the rule or a local perspective that illuminates the issue].
Many investment firms support the implementation of the rule and have in fact already taken significant steps to prepare for its implementation. Delaying the rule for an additional 60 days will only allow the worst actors in this sphere to continue taking advantage of investors. No new information will be learned in the 60 days that the rule could be postponed, but a lot more money will be wasted.