June 14, 2021

Brad Campbell Discusses Potential DOL Fiduciary Rule Rewrite With InvestmentNews

In the article “DOL seeks to define ‘fiduciary’; SEC works on ESG disclosures,” InvestmentNews turned to benefits and executive compensation partner Brad Campbell for insight on the Department of Labor’s (DOL) newly released regulatory agenda. The DOL plans to propose a rule by the end of the year that would target conflicts of interest for financial advisers working with company retirement plans and individual retirement accounts.

The publication explained how the DOL could modify a five-part test to determine fiduciary status based on “developments in the investment marketplace, including in the ways advisers are compensated that can subject advisers to harmful conflicts of interest,” according to the agenda item.

For example, the Obama fiduciary rule replaced the five-part test with a legally binding best-interest contract exemption, which was a central part of an industry lawsuit that led to the Obama rule being vacated by a federal court.

“Unfortunately, this is 2016 all over again,” said Campbell. “My prediction is they’re going to fundamentally redraft the regulation and do away with the five-part test.”

Campbell recommended that the DOL be cautious in approaching a potential fiduciary rule rewrite given the successful legal action against the Obama rule. “Hopefully, the DOL learned some lessons in terms of legal challenges and the negative real-world effects on retirement savers,” he added.

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