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BUSINESS Wednesday 24 May 2017
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Obama-era rule on financial advisers to go forward, for now

MARCY GORDON fiduciary rule see it as key
AP Business Writer to guaranteeing the integ-
WASHINGTON (AP) — The rity of the advice they get
Trump administration is al- on where to invest it. The
lowing to go forward an aim of the rule, put in by
Obama-era rule that puts the Obama administration
stricter requirements on about a year ago, was to
professionals who advise prevent financial advisers
retirement savers on their from steering clients toward
investments. But it’s leav- investments with higher
ing open the possibility that commissions and fees that
deep changes to the rule can chip away at retire-
will still be made. ment savings.
Wall Street and Repub- Investors would save about
lican lawmakers have $4 billion annually under the
been pushing against the rule, according to Obama
so-called “fiduciary” rule, administration estimates.
which requires that finan- The financial industry, on
cial pros who charge com- the other hand, has argued
missions put their clients’ that the rule would limit re-
best interests first when ad- tirees’ investment choices
vising them on retirement by forcing advisers to steer
investments. President Don- them to low-risk options.
ald Trump in February told Consumer advocates
the Labor Department to greeted Acosta’s an- In this March 22, 2017, file photo, then-Labor secretary-designate Alexander Acosta testifies on
delay implementing the nouncement, which ap- Capitol Hill in Washington.
rule, due to be phased in peared as a departure Associated Press
starting June 9. from a string of moves in re- investments that can be decision. Major Republican legisla-
But Trump’s new labor sec- cent months by the admin- risky or otherwise not in the The rule that will take effect tion to unwind the Dodd-
retary, Alexander Acosta, istration and Republican client’s best interest. next month “significantly Frank law, now pointed
said Tuesday the depart- lawmakers to ease regula- Variable annuities can pro- harms consumers’ ability toward a vote by the U.S.
ment has decided not to tions. vide higher returns from the to plan and save for finan- House, would repeal the
delay the rule while it seeks The move was “a great vic- stocks or bonds they are cially secure retirements,” Labor Department rule.
public input on how to tory for Americans saving tied to, but they are riskier ACLI President Dirk Kemp- It would not be replaced
change it. for retirement,” said Den- than fixed annuities, which thorne said in a statement. until the Securities and Ex-
“Respect for the rule of law nis Kelleher, the president pay a set income to an in- “As currently written, the change Commission came
leads us to the conclusion of Better Markets, a group vestor for life. regulation limits retirement up with a separate rule for
that this (June 9) date can- that advocates for stricter “The rollover decision at re- savers’ access to educa- all investments, not just re-
not be postponed,” Acosta regulation. tirement may be the most tion and information about tirement assets, prescribing
wrote in an op-ed piece Pamela Banks, senior poli- important one many in- annuities, the only financial standards for brokers and
in The Wall Street Journal. cy counsel for Consumers vestors ever make and it is products in the market- advisers — and it would
“Trust in Americans’ abil- Union, urged the Labor De- often irreversible. It gener- place that guarantee life- have to be close to the
ity to decide what is best partment “to resist industry- ally involves large sums and time income.” SEC’s rule. The SEC may be
for them and their families led efforts to diminish or there have been many re- Undoing the fiduciary rule expected to take a friend-
leads us to the conclusion weaken the rule and the ports of abuse,” financial was part of a promised as- lier approach to the finan-
that we should seek public important protections it analysis firm Dalbar said sault by Trump on financial cial industry than the Labor
comment on how to revise provides.” Tuesday. “Now that the fi- rules put in by President Department.
this rule.” Experts say problems some- duciary rule is cast in stone, Barack Obama and Demo- Acosta concluded his op-
Americans have about $14 times arise when people common rollover practices cratic lawmakers after the ed by saying the Labor De-
trillion in retirement sav- who are retiring “roll over” violate regulations.” 2008-09 crisis and Great Re- partment “will roll back reg-
ings — in 401(k) retirement their employer-based The American Council of cession. ulations that harm Ameri-
accounts, other defined- 401(k) assets into IRAs. Bro- Life Insurers, whose mem- Trump ordered a govern- can workers and families.
contribution plans such as kers may persuade them to ber companies sell annui- ment review of the Dodd- We will do so while respect-
federal employees’ plans put those assets into vari- ties for retirement income, Frank financial oversight ing the principles and insti-
and in individual retirement able annuities, real estate said it was disappointed law, which he has called a tutions that make America
accounts. Supporters of the investment trusts or other by the Labor Department’s “disaster.” strong.”q