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.