Financial Planning Coalition: Alternative Fiduciary Proposals Fail to Meet Basic Requirements of Best Interest Standard

The Financial Planning Coalition issued the following statement after filing a supplemental comment letter supporting the Department of Labor’s (DOL) re-proposed fiduciary rule:

“The DOL’s re-proposed fiduciary rule is a long overdue and much-needed update to the 40 year-old definition of ‘fiduciary’ under the Employee Retirement Income Security Act (ERISA). Americans deserve a secure retirement, and the re-proposed rule, with suggested modifications, ensures that the retirement savings advice they receive is in their best interest.

“Proposals from financial services organizations and firms, described as alternative approaches to a best interest standard, would actually dilute the DOL’s efforts to put in place critical protections for retirement investors. All of the alternative proposals fail to meet the basic requirements of a true fiduciary standard under either ERISA or securities law, and fall significantly short of the DOL’s policy goals to more closely align the incentives of firms and advisers with the interests of our nation’s retirement investors.

“While some continue to argue that the rule is unworkable, the Coalition and its stakeholders offer their experience with the fiduciary standard to demonstrate the contrary. Regardless of business or compensation model, the Coalition’s 80,000 financial planners provide financial planning services under a fiduciary standard, successfully contributing to their firms and practices while providing needed benefits and protections for retirement investors.”