May 28, 2021

InsuranceNewsNet Outlines Takeaways From Panelist Brad Campbell on the Future of the DOL Fiduciary Rule

In “‘Another Fight’ Brewing If DOL Revives Fiduciary Rule, Attorney Says,” InsuranceNewsNet shared panel insights from benefits and executive compensation partner Brad Campbell on potential changes to the Department of Labor’s (DOL) fiduciary rule.

The publication noted that in February, the DOL allowed the investment advice rule written by the Trump administration to take effect. Campbell explained that the Biden administration is now signaling a desire to return to the fiduciary-style rule published by the Obama DOL in 2016.

“We’re continually in a period of flux in this space, which is frustrating to everyone,” said Campbell.

Regarding the potential legal issue concerning the best interest standard included in the investment advice rule, Campbell emphasized that it presents a substantial hurdle for the Biden DOL.

InsuranceNewsNet also detailed how the Trump investment advice rule includes a new prohibited transaction exemption (PTE 2020-02) to permit advisers to be compensated for providing conflicted advice.

“It covers a commission, but does it cover administrative payments, marketing reimbursements, loan forgiveness, all sorts of other forms of compensation – are those included in a commission, or can they be included in a commission?” Campbell asked. “While there’s some evidence historically to suggest the answer might be yes, the current DOL has indicated that they don’t really like that.”

In the long term, Campbell suggested the DOL will try to narrowly define the traditional “special relationship” advisers have with clients.

“I think what the DOL might do is say, ‘Let’s forget all about this five-part test stuff and all these nitpicky rules about how all these fit together. Why don’t we just look at the objective relationship between these two people, the financial professional and the participant?’” Campbell said.

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