When it comes to the DOL’s fiduciary rule, most of the focus within the DC industry has been on the effect the rule would have on advisors. But make no mistake: Record keepers are keenly aware of what it could mean to them as well. At the IRI’s recent Government & Legal Regulatory conference, insurance record keepers warned that if they were deemed to be fiduciaries under the expanded definition proposed by the DOL — a definition that arguably would prohibit the use of proprietary investments or acceptance of revenue sharing — the industry would experience severe contraction.
Steve Saxon of the Groom Law Group stated that it’s unlikely that the DOL would be satisfied with disclosure by record keepers — meaning that exemptions would be required. Calling it the most important regulatory initiative in 20 years, Saxon speculated that there could be a long comment period, perhaps pushing the process into 2016.
Meanwhile, the White House is getting involved in the proposed rule, which is a rarity for a technical regulation. A new White House Economic Council is expected to perform an industry outreach, working on big picture issues. NAPA’s Executive Director/CEO Brian Graff stated, “The White House examination reflects all the political pressure that's been placed on the White House by congressional Democrats over this regulation.”
