Is the Fiduciary Definition Re-Proposal a Good Idea?
The Employee Benefits Security
Administration said it would “re-propose”
its expanded fiduciary definition proposal.
Now, of course, at this point, we don’t
know what that re-proposal will look like
(though EBSA said it anticipates it will
clarify that fiduciary advice is limited to
individualized advice directed to specific
parties, respond to concerns about the
application of the regulation to routine
appraisals, and clarify the limits of
the rule’s application to arm’s-length
commercial transactions, such as swap
transactions, among other things).
I asked readers what they thought of the
A plurality (
38.5%) said it was a good
thing, though nearly as many (
thought it was a thing of “mixed
3.3% thought it was a “bad” thing,
18.7% saw it as a thing of “no real
consequence at all.”
However, the remaining roughly 6% opted
for “other”—and nearly all of those were
in the “it depends what the re-proposal
looks like” camp (the rest were primarily
in the “not sure” category).
Among this week’s verbatim comments
were the following:
Since the objective always seems to
be to find fault with the fiduciary, clarity
(and maybe some reality) is vital to the
So, what was wrong with previous
Another example of the government
trying to “protect” people by controlling
industry rather than letting the
marketplace control the industry.
It’s good that a (hopefully) more
reasonable standard will prevail; it’s
bad that so much time and anxiety will
continue to be chewed up by this issue.
No matter how much “clarification,” the
more words and examples it uses, the
more there will be exceptions to the
People keep saying that making brokers
act as fiduciaries will cause investors
to be unable to have small IRAs. They
seem to have forgotten the portion of
the market that already is investing in
IRAs without the help of a broker or
other financial adviser. Generally, the
people who are using an adviser are the
ones most likely to need that fiduciary
Unfortunately, the DoL simply didn’t
comprehend how wide a net they were
casting with something that would be
either unenforceable, or so wide a net
that everyone would be a fiduciary—
including Nevin, since his editorials
may have been relied upon. Politically
speaking, Phyllis Borzi has no choice.
When a federal regulatory agency does
not do something, it is generally a good
Like the thousands of pages of health-care reform, we’ll sum it up with
thousands of pages of clarification.
Hurry up and wait. Wait some more.
Wait more. Finally, finals are out, but the
regs need to be clarified. Wait again.
Wait some more. Wait more. Are we
seeing a pattern here?
The Editor’s Choice goes to the reader
who said, “Delaying something is always
a good thing!”
Thanks to everyone who participated in