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Former regulator Borzi takes on Reg BI and the DOL exemption

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This article originally appeared on CityWireUSA by Ian Wenik.

Phyllis Borzi is shaking her head at the recent changes to investment advisor regulations.

The Securities and Exchange Commission’s (SEC) Regulation Best Interest standard of conduct for broker-dealers is now the law of the land, and the Department of Labor (DOL), her old employer, is preparing to move forward with a new class exemption rule proposal – the Trump administration’s take on the very fiduciary rule she designed while assistant secretary for employee benefits security.

‘Based on an examination of the SEC’s Reg BI and other guidance as well as the industry’s description of DOL’s capitulation to the SEC’s regulatory structure, we know for sure that the DOL’s rule, like the SEC’s rule, will be worse than current law,’ Borzi says. ‘The only question in my mind is how much worse?’

The DOL’s proposed class exemption would allow retirement plan advisors to be compensated via commissions, 12b-1 fees and revenue-sharing payments, among other previously prohibited types of compensation, while the Obama-era rule forged by Borzi intended to define brokers managing retirement accounts as fiduciaries obligated to act in their clients’ best interests.

Read the full article on CityWireUSA.

Dan Moisand

 

Dan Moisand is a nationally recognized fiduciary fee-only financial planner, an Institute Real Fiduciary™ Advisor and Chair-elect of the CFP Board.

The Institute has enshrined the ‘Moisand Rule’ on fiduciary practices. It is basic and is more important today than ever: “You have to avoid conflicts. If I avoid a conflict, I don’t worry about it.”

Watch the video of Moisand speaking here.

Bob Veres

 

Bob Veres is a long term observer of financial planning. His Newsletter, “Inside information” Is a staple of leading planners. In the May edition he writes about fiduciary and the Institute.

"But a much bigger point is that the fiduciary standard—as Knut Rostad of the Institute for the Fiduciary Standard has pointed out—has been determined by the Supreme Court (1963 ruling) to be at the very heart of the Investment Advisers Act of 1940. It is the foundation of what it means to be an RIA registered with the SEC instead of a tipster or a tout."

- Bob Veres, Parting Thoughts ... The SEC's Own Compliance Culture