In an exclusive interview with Chris Carosa of FiduciaryNews, EBSA Director Phyllis Borzi weighs in on several key topics — including her agency’s commitment to redefining the fiduciary rule to protect investors from what she calls “conflicted advice.” The proposed rule is moving forward, though further delays are expected.
NAPA has expressed concerns about the rule, especially regarding its potential effect on advisors working under a commissioned model for IRA rollovers. This concern was echoed by delegates, members of Congress and Hill staffers at NAPA’s recent DC Fly-in Forum. One staffer commented that if the DOL follows administrative procedure rules, which it seems to be doing, it will take an act of Congress to stop it.
Other topics Borzi addresses in the Q&A include:
• Fee Disclosure — Borzi is pleased with the results of the recent disclosure rules but conceded that it will take time for the full effects to be felt and that adjustments will have to be made, such as a uniform format. A draft guide for service providers is under review at the OMB, she says.
• MEPs — There is concern that open MEPs leave too much room for fraud and abuse — like the one run by convicted felon Matt Hutcheson, for example.
• Enforcement — Borzi notes that along with outreach programs to educate plan sponsors, her agency is committed to enforcement, with $1.2 billion in fines and penalties collected in the last fiscal year.
Borzi states that the need to strengthen the fiduciary rule was a theme she heard over and over when she joined the agency. She believes that the old rules are just not adequate to protect investors who are relying more on advisors for retirement planning today than they did in the past, when DB plans were more popular.
If you had the opportunity to chat with Borzi for five minutes, what would you ask? Use the comment box below.
