Occupy the SEC Submits Letter to Department of Labor Regarding its Proposed Implementation of Fiduciary Rule

Occupy the SEC (“OSEC”) has submitted a letter to the Department of Labor (“DoL”) regarding that agency’s proposed fiduciary rule, which would significantly change the standard of conduct that applies to investment advisers dealing with certain retirement accounts.

The DoL’s proposed fiduciary rule is a vital change because it reflects a basic market reality: investors (and even sponsors and plan employees) believe that professionals providing retirement advice have the investor’s best interest in mind. Unfortunately, many retirement advisers do NOT have the investor’s very best interest in mind, for the simple fact that that is not legally required under the current suitability standard. In its letter, OSEC argues that a strong fiduciary rule is necessary to bridge the gap between investor expectations and the law.

OSEC recommends that the agency set forth a clear rule that minimizes exceptions to the applicability of the fiduciary standard. A proper understanding of the term “fiduciary” does not tolerate the number of exemptions crafted by the DoL in the Proposed Rule. OSEC urges the agency to avoid adopting a contrasting approach that pays lip-service to the heightened fiduciary standard while simultaneously invoking that standard with sweeping exemptions that resurrect the old suitability standard.

Furthermore, OSEC encourages that the Final Rule safeguard the interests of plan participants/beneficiaries and IRA Holders, broadly cover entities as investment advisors, and harmonize with existing fiduciary requirements while accounting for the unique characteristics of the fissured ERISA service provider environment. Ultimately, the Rule must protect investors by establishing clear standards that facilitate compliance and obviate the need for Agency and other enforcement actions for misconduct.

Occupy the SEC is a group of concerned citizens, activists, and financial professionals that works to ensure that financial regulators protect the interests of the public, not Wall Street. For further information, visit http://occupythesec.org or email info@occupythesec.org.

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