Market Regulation

Groups Outline Next Steps for DOL to Strengthen Advice Rules

A diverse group of 30 organizations and 10 individuals submitted a letter to the Department of Labor (DOL) outlining additional steps the Department should take to strengthen the rules governing retirement investment advice. The letter voices strong support for the guidance issued by the Department in April clarifying the steps firms must take to comply with the rules. “By staking out a tough stance on the obligation to mitigate conflicts of interest, the Guidance sends a strong message that the Department is committed to doing all it can, within the limits of the Exemption, to ensure that workers and retirees receive appropriate protections when they turn to investment professionals for retirement investment advice,” the letter states.

The groups added, however, that “Guidance can only take us so far.” The letter outlines the additional rulemaking that is needed to “close legal loopholes that would otherwise enable firms to evade appropriate application of the fiduciary duty, and to ensure that the duties set forth in the Exemption actually reflect and implement the strong fiduciary standard set forth in ERISA.” The Department has indicated that it is considering additional rulemaking along these lines.