The back and forth over the fiduciary rule has been agonizing, but new comments from the SEC have just arrived like an earthquake. Almost two months ago the SEC’s chairman, Michael Piwowar, heavily criticized the DOL’s fiduciary rule, but on Friday he formally said that the SEC should be the one drafting rules over conflicts of interest and said he wanted to do so. Piwowar said the DOL’s rule wasn’t written to protect investors, but to make it easier for lawyers to sue brokers. Talking about the rule, he commented that “It was meant to be unworkable”, and said that it was a highly political effort from the Obama administration. Through the Dodd-Frank the SEC was given power act to craft legislation regarding fiduciary duty, but it has not done so yet. It has the authority to enforce fiduciary rules across all areas, not just retirement accounts.
FINSUM: The DOL always seemed to be usurping the SEC’s role by making a fiduciary rule, and we think this is a signal the SEC is about to grab back the reins and craft their own comprehensive rule. Our view is that SEC-led rules would be the best outcome for all parties.
Source: Wall Street Journal