Regulations Archives - RetireAware Blog : RetireAware Blog

Allen Steinberg

19.07.2019 02.55 GMT+0000

The SEC’s new Regulation BI relies heavily on increased disclosure of conflicts of interest to protect investors. However, there is research indicating that, where an economic conflict exists increased disclosure makes things worse--not better. This research is worth considering as we assess the implications of these new rules.

Understanding the Impact of Disclosure

Research indicates that disclosing conflicts of interest may not have the desired effects.

Broker Conflicts Disclosures

SEC rules to protect investors from brokers (with conflicting economic incentives) relies heavily on disclosure of these conflicts. However, some academic research raises questions about the impact of increasing disclosure where parties’ interest may conflict. Significantly, conflicted advisors may provide more biased advice (to offset the impact of the disclosure) and customers may not adequately assess or consider the nature of the conflict.

Allen Steinberg

25.06.2019 05.38 GMT+0000

SEC Finalizes New Standards for Broker Dealers

The SEC has adopted new rules for broker-dealers that expand disclosure requirements and require broker-dealer to act in the “best interest” of customers.

Broker Conflicts Disclosures

The SEC has finalized rules governing the behavior of broker-dealers. Under this rule broker dealers need to (i) provide investors with additional disclosure regarding fees, services and conflicts of interest and (ii) use care and diligence to develop a reasonable belief that a recommendation is in the “best interest” of the customer and not place the interest of the broker dealer “ahead of” the interest of the customer.

Allen Steinberg

12.12.2018 06.53 GMT+0000

In the absence of new regulatory support, employers need to use their power in the market to protect participants from conflicted service models.

The (Financial) Empires Strike Back

Initiatives to provide participants with protection from conflicted service models frequently meet with resistance from…the financial industry. What can employers do?

financial industry Regulations

Government initiatives aimed at protecting retirement plan participants from conflicted advice are often resisted -- and occasionally derailed -- by the financial services industry. Employers must understand that regulatory agencies are constrained and, rather than wait for regulatory protections employers must understand that they are in the best position to protect participants.

Allen Steinberg

27.04.2018 03.36 GMT+0000

The SEC’s proposed new rules require broker-dealers’ obligations to act in customers’ “best interests.” The SEC proposal, in some ways, fills some of the gaps created by the recent court decision to invalidate DOL regulations expanding the definition of ERISA “fiduciary.”

The SEC Enters the Fiduciary Fray

The SEC has now weighed into this fiduciary fray, proposing new rules governing the behavior of broker-dealers.

Broker Conflicts Disclosures

The SEC has proposed new rules governing the behavior of broker-dealers. Under this proposal a broker- dealer “shall act in the best interest of the retail customer . . . . without placing the financial or other interest of the [broker-dealer] ahead of the retail customer.” The primary requirements of “best interest” are that broker-dealers disclose fee structures and not place their financial interests ahead of customers’ interests.

Allen Steinberg

10.04.2018 04.07 GMT+0000

The latest court decision invalidating the DOL’s proposed rewrite of the fiduciary rules adds more uncertainty for plan fiduciaries. How do fiduciaries get past the “noise” of conflicting courts and regulators and go about the business of protect plan interests?

Nature Abhors a Vacuum – and So Should Fiduciaries

Conflicting court opinions, dueling regulators and uncertain direction from the executive branch are making it harder for plan fiduciaries to do their jobs.

Courts DOL Fiduciary Duties

The U.S. Court of Appeals for the Fifth Circuit decision to invalidate the DOL’s new fiduciary rule is the latest in a string of confusing (and often conflicting) messages to plan fiduciaries. However, fiduciary duties under ERISA are grounded in some core principles that have not changed. The legal confusion surrounding certain fiduciary issues cannot obstruct fiduciaries’ execution of those duties.

Allen Steinberg

19.03.2018 09.00 GMT+0000

A new court decision could give the Administration an opportunity to completely withdraw the regulations expanding ERISA’s definition of fiduciary and limit the ability to expand the scope of ERISA’s fiduciary protections in the future.

Court of Appeals Strikes Down Fiduciary Rule

The U.S. Court of Appeals for the Fifth Circuit has issued an opinion striking down the DOL’s new fiduciary rule. The decision will add more (unwelcome) uncertainty.

Court fiduciary

On March 15 the U.S. Court of Appeals for the Fifth Circuit struck down the DOL’s new fiduciary rule. The decision, in very sweeping terms, concluded that the DOL did not have the regulatory authority to expand the previous definition of “fiduciary” contained in 1975 regulations. The breadth of the Court’s ruling, if upheld, makes it virtually impossible for the DOL to somehow modify the fiduciary proposal or to issue new fiduciary rules.