DOL To Hold Online Hearing on Proposed Investment Advisor Rule

The Department of Labor will hold an online hearing on its controversial proposed rule that would put more limits on financial advisors.

By Rethinking65

The Department of Labor will hold an online hearing beginning Dec. 12 on its controversial proposed rule that would put more limits on financial advisors.

The proposal, “Retirement Security Rule: Definition of an Investment Advice Fiduciary,” would define advisors as fiduciaries if they provide investment advice to retirement plan participants and owners of individual retirement accounts (IRAs).

“The proposals would protect investors saving for retirement by requiring trusted advice providers to adhere to high standards of care and loyalty when making investment recommendations and avoid recommendations that favor their financial interests at the expense of the investors,” the DOL said in announcing the hearing.

If you want to testify

The hearing will begin at 9 a.m. Eastern Standard Time on Dec. 12 and Dec. 13. It will continue on Dec. 14 at 9 a.m. EST if more time is needed. Those interested in testifying at the hearing must submit a request to the department at on or before Nov. 29, 2023. The hearing notice with additional details about testifying is posted on the Employee Benefits Security Administration website and will be published in the Federal Register. The hearing will be transcribed and EBSA will provide the transcript on its website.

“The hearing will provide interested parties with a full opportunity to provide important public input that will inform the Department of Labor’s next steps in the rulemaking process for the proposal,” said Assistant Secretary for Employee Benefits Security Lisa M. Gomez.

60-day comment period

The proposed rule and proposed exemption amendments contain a 60-day comment period, scheduled to close on Jan. 2, 2024. The department encourages plan officials, plan participants, IRA owners, investment advice providers and other interested parties to submit comments on the proposed rule and proposed exemption amendments during the comment period, and to participate in the virtual public hearing.

CFP Board, FSI

The CFP Board supports the public release of the new rule. When the proposed rule was announced in late October, the Board said the current law is outdated and “does not prevent advisors from taking advantage of gaps in the regulations to steer their clients into high-cost, substandard investments that pay the advisor well but eat away at retirement investors’ nest eggs over time.”

Dale Brown, president and CEO of the Financial Services Institute (FSI), whose members are committed to complying with the SEC’s Regulation Best Interest (Reg BI), issued a more cautious statement following the DOL announcement on the proposed fiduciary rule: “It is imperative that new regulations harmonize with Reg BI,” he says. “Introducing more conflicting regulations would be unnecessary and could potentially hinder middle-class Americans’ ability to achieve a financially secure retirement.”

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