Description: The memorandum directs the secretary of labor to examine the fiduciary rule and “prepare an updated economic and legal analysis concerning the likely impact of the Fiduciary Duty Rule.” According to the memorandum, if the labor secretary determines that the rule is likely to harm investors, will result in “dislocations or disruptions within the retirement services industry,” or “cause an increase in litigation,” then the labor secretary should begin the administrative process to rescind or revise the rule.
Fair Economy Impact: The rule simply requires financial advisers to provide what most clients probably already think they are receiving: advice about their retirement plans untainted by conflicts of interest. It would prohibit common practices such as steering investments to companies that pay the adviser a commission. Opponents of the fiduciary rule want to preserve a system that allows financial advisers to give their clients advice that is in the adviser’s interest rather than the client’s. Conflicted advice leads to lower investment returns, causing real losses for the clients who are victimized.
- Issued February 3, 2017