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Advocacy in action blog

The U.S. Department of Labor has proposed a new rule to govern the standard of care for producers providing consumers with retirement guidance and products. NAIFA was a part of the lawsuit, along with the American Council of Life Insurers and other groups, that resulted in the DOL’s original fiduciary rule being struck down by the Fifth Circuit Court of Appeals in 2018. The new proposal would create a “best interest” prohibited transaction exemption (PTE) for ERISA- and Internal Revenue Code-covered investment advice fiduciaries.

The new DOL proposal would require financial professionals providing retirement guidance and products to work in the best interests of their clients. It would enhance consumer protections and preserve the ability of many middle-income Main Street Americans to receive help as they prepare for retirement.

“The DOL’s new proposal would remedy many of the problems with the original fiduciary rule,” said NAIFA CEO Kevin Mayeux. “It is designed to allow existing business models, product offerings, and compensation arrangements to continue. The DOL coordinated with the Securities and Exchange Commission to ensure the rule is in harmony with the SEC’s Regulation Best Interest, which is crucial to avoid contradictions and confusion among financial professionals and consumers. The new DOL proposal also avoids the ‘best interest contract’ requirements that were problematic in the original DOL rule.”

NAIFA is reviewing the rule in depth and will provide additional analysis.