The Department of Labor wants to impose new rules to ensure financial fiduciaries act in the best interests of their clients. But the department’s so-called “fiduciary rule” defines “fiduciary” so broadly that virtually anybody in the financial services industry—including broadcast financial commentators—could be deemed liable for advice they give, writes John Berlau. Further, he says, the rule’s definition of “best interest” is so vague that it would lead to restricted investment options for American savers.
The Department of labor’s (DOL) needlessly complex “fiduciary rule” is now being reviewed at the Office of Management and Budget and is soon to become a final rule. Given the language in the rule, DOL may well believe it was drafting a “fiduciary rule for dummies,” because it expresses doubt that savers can make wise investment choices in their 401(k)s and individual retirement accounts. In the proposed fiduciary rule it issued last April, DOL proclaims that individuals cannot “prudently manage retirement assets on their own,” and that they “generally cannot distinguish good advice, or even good investments results, from bad.”
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Since when is the DOL entitltled to enact law?