Regulatory Outlook | 07.07.20
The DOL Takes on Regulation Best Interest
The Department of Labor (DOL) is proposing a new regulation that would effectively allow advisors and brokers who work as fiduciaries to be paid on commission for selling investment products to individual investors’ retirement accounts. The proposal piggybacks on the SEC's Regulation Best Interest and aims to iron out wrinkles between the two regulators' polices when it comers to retirement plans. While some view the proposed regulation mostly as a technicality needed to allow Regulation BI to go into effect with less confusion, others see it as a bid to relax investor protections. “This is all about giving legal protections to ... financial companies from having to adhere to the ERISA fiduciary standards,” said Jamie Hopkins, director of retirement research at the Carson Group. “They can now say they’re working in a client’s best interest and take a commission as long as it’s reasonable, but we know that reasonable fees have been hard to enforce with commission-based fees.”
Read the full article on Barron's.