February 01, 2021

Fred Reish Discusses How the New Administration May Impact DOL Investment Advice


In the article “A New Start To An Elusive Rule?” InsuranceNewsNet reported on how the Department of Labor (DOL) led by the Biden administration will likely amend the Trump administration’s investment advice rule and move closer to the Obama-era DOL’s fiduciary rule.

The publication turned to benefits and executive compensation partner Fred Reish for his insight on what can be expected from the Biden DOL. Reish explained that the DOL will likely target a specific exemption allowing “investment advice fiduciaries” to engage in certain transactions that would otherwise be prohibited.

Reish noted that there are some aspects of the Trump rule that the Biden team may work with.

“In the preamble to the rule, the DOL expanded its interpretation of who is a fiduciary,” Reish said. “I suspect the new administration will agree with that and may even build on it. That part will, at the least, survive the change of administrations.”

Reish added that while the Trump rule was tough, as it included restoring the original “investment advice” regulation and its five-part test for defining an investment-advice fiduciary, it falls short of where Democrats stand on conflict-of-interest issues.

“Historically, Democratic administrations have been more concerned about financial conflicts of interest than Republican ones,” Reish said. “After all, that is what this new rule is all about. I don’t see the exemption going through unscathed as written.”

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