Retirement adviser rule to go into partial effffffffffffect, but changes still possible

pensation, company profits or other factors.

The Obama administraWASHINGTON — A controtion said those conflflicts of versial Obama-era rule for interest cost consumers $17 retirement advisers, delayed billion a year as they are by a review ordered by Presisteered toward IRAs and dent Donald Trump because other retirement investof strong Republican and ments with higher fees or fifinancial industry opposilower returns. tion, will partially take effffffffffffect Acosta’s decision “is a win next month, Labor Secrefor retirement savers, but tary Alexander Acosta said. it’s the battle that’s been

But Acosta indicated that won and not the war,” said he has problems with the Barbara Roper, director of r ul e and t hat t here s t i l l investor protection at the could be changes or a repeal Consumer Federation of before all of its provisions America, which supports kick in next year. the rule’s full implemen

The regulation, known as tation. the fifiduciary rule, requires “Industry has made clear investment brokers who they will not be satisfied handle retirement funds until they’ve seen this rule to put their clients’ intergutted, and that fifight goes ests ahead their own com- on,” she said.

Opponents, including key players in the fifinancial industry and most Republicans, complained that the rule would increase the cost of investments by forcing asset management fifirms to spend money on implementation and make it more diffificult for average Americans to get retirement advice.

T h e Re p u b l i c a n c o n - trolled Congress voted last year to overturn the rule, but Obama vetoed the measure.

Acosta echoed concerns of opponents in an opinion article for the Wall Street Journal, saying the rule “as written may not align with President Trump’s deregulatory goals,” Acosta said.

“T h i s a d mi n i s t r a t i o n presumes that Americans can be trusted to decide for themselves what is best for them,” Acosta wrote. “Certainly, it is important to ensure that savers and retirees receive prudent investment advice, but doing so in a way that limits choice and benefifits lawyers is not what this administration envisions.”

Trump ordered a review of the rule on Feb. 3, with White House Press Secretary Sean Spicer calling it “regulatory overreach” by the Labor Department.

Parts of the rule were supposed to take effffffffffffect April 10, but the Labor Department delayed that for 60 days to conduct the review.

Noting that some opponents of the rule have called for a continued delay, Acosta said his review of the Administrative Procedure Act has “found no principled legal basis” to do so.

“Respect for the rule of law leads us to the conclusion that this date cannot be postponed,” Acosta wrote in the Wall Street Journal opinion article.

“The Labor Department will roll back regulations that harm American workers and families,” he said. “We will do so while respecting the principles and institutions that make America strong.”

Some provisions will go into effffffffffffect June 9, including the requirement that fifinancial advisers act in the best interest of their clients. But a key component of the regulation, that fifirms accepting commissions put the pro- visions into customer contracts, will not take effffffffffffect until Jan. 1.

So while retirement advisers will be required to act in their customers’ best interest, that polic y is largely unenforceable until the contract provisions are in place.

The contract allows customers to pursue class-action litigation even if they’ve signed an arbitration agreement. Jaret Seiberg, an analyst with brokerage and investment bank Cowen & Co., said in a research note that he expects a delay in implementing that part of the rule of as long as a year and believes the Labor Department ultimately will propose eli minating the ability of customers to fifile class-action suits.