We have some interesting new information on the recently revised DOL trust rule. Last week, the DOL sent what is largely considered its new fiduciary rule to the OMB, entitled "Improving Investment Advice for Workers and Retirees". The text of the rule has not been released, so only speculation has been made at this point. That said, a prominent industry attorney who is familiar with the current process said he expects the rule to have very close coordination with the SEC Reg BI. So much so that, in fact, the lawyer – George Michael Gerstein, co-chairman of the Stradley Ronon Stevens & Young trustee group – expects that if a company abides by Reg BI it would probably be completely exempt from the trust rule. In his own words, "The DOL leadership under President (Donald) Trump stressed that they want the SEC to take the lead in terms of conflict of interest, particularly when it comes to brokerage practices. It now appears probable that if a broker / dealer (B / D) takes actions which are equivalent to providing investment advice under the Employee Income Security Act (ERISA), to the extent that the entity respects Reg BI , this will be enough to fulfill ERISA's fiduciary duties. "
FINSUM: It seems that Reg BI will be the dominant rule and that anyone who abides by it could be exempt from the DOL application. This will likely be music for many in the industry.
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