Fiduciary Standard Thrust and Parry Continues

In the aftermath of the recent U.S. Department of Labor hearings about the fiduciary standard, the debate continues with fervor. In the last few days, I have seen television ads that are subtle but seem to impugn attempts at getting a final rule in place. Elsewhere, estimates suggest that regulations could be costly. According to "SIFMA: DOL Fiduciary Rule To Cost Firms Over $5 Billion" (Wealth Management, July 20, 2015), the Securities Industry and Financial Markets Association posits that broker-dealers will incur a large start-up outlay of about $5 billion and then ongoing costs thereafter in excess of $1 billion. Others counter that the benefits are considerable and worth the incremental expense.

Ongoing lively debates may not make a difference if Plan Sponsor's John Manganaro is correct. In "DOL Stands Firm on Fiduciary Rule Despite Negative Comments" (August 12, 2015), the point is made that Secretary Perez feels strongly that the U.S. Department of Labor (a) has been diligent in vetting critics' comments and (b) making modifications to hopefully ensure flexibility.

School is still out as to the "what, when and how." I predict that the aftermath may offer unexpected surprises. As with so many mandates, there are plenty of people who immediately look for the loopholes and act accordingly.

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