Statement of Investment Adviser Association President & CEO Karen Barr on DOL Fiduciary Rule
Washington, DC (April 6, 2016) – “Millions of Americans are now responsible for directing their own retirement investments, and often depend on investment advice for guidance on how to manage their savings. These investors deserve to receive advice that’s in their best interest.
“The IAA is pleased to see that the Department of Labor clearly recognizes that many advisers already commit to providing high-quality advice that always puts their client’s best interest first. We have long believed that the fiduciary standard should be applied to all financial professionals giving investment advice. Our members, SEC-registered investment advisers, are already held to that standard.
“The IAA is also pleased to see that - based on preliminary information - the DOL appears to have taken a number of our significant concerns with the proposal into account. For example, the IAA and others commented that the proposal appeared to favor low-fee and low-cost – typically passively managed - investments over all else, ignoring returns, quality, and other factors that may be important to investors. The DOL expressly acknowledges that it did not adopt the low-fee streamlined option considered in the proposal because of that concern, and further clarified that the adviser is not required to recommend the lowest fee option if another investment is better for the client. These are welcome changes.
“We also welcome the DOL’s clarifications on the timing of fiduciary status, as it appears that the final rule makes it clear that “hire me” discussions that do not include investment recommendations are not fiduciary recommendations.
“The IAA had recommended a number of other changes to the rule. We look forward to analyzing the full text of the rulemaking to assess how those concerns were addressed and to determine whether further clarifications from the DOL are necessary.”
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About Investment Adviser Association
The Investment Adviser Association (IAA) is the leading trade association representing the interests of SEC-registered investment adviser firms. The IAA’s more than 600 member firms collectively manage assets in excess of $16 trillion for a wide variety of institutional and individual investors. In addition to serving as the voice of the advisory profession on Capitol Hill and before the SEC, DOL, CFTC and other U.S. and international regulators, the IAA provides extensive compliance and educational services to its membership. For more information, visit www.investmentadviser.org or follow us on LinkedIn, Twitter, and YouTube.
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