New DOL rule no big deal, says Stifel’s Kruszewski
The securities industry typically fights tooth and nail any new form of regulation over how products are sold to investors, typically claiming any added expense created by rules will cut services to clients.
But the Department of Labor’s new fiduciary rule that was released Tuesday failed initially to elicit any vitriol from one CEO, Stifel Financial Corp.’s Ron Kruszewski.
“At least after an initial review of the rule, it appears to be less restrictive than what was proposed,” said Kruszewski, who spoke with analysts Wednesday morning about Stifel Financial’s first quarter results. “I think that a number of people in the administration are trying to not create a rule that is so similar to the one that was struck down by the Fifth Circuit back in 2018.”
The insurance industry will be on its guard about the new rule, he said. “I would say that the rule really targets primarily fixed indexed annuities, which we don’t really sell at Stifel.”
An overhaul of a 1975 regulation that the insurance industry has fought tooth and nail, the new rule will for the first time subject many agents selling annuities to the Employee Retirement Income Security Act.
The new rule “probably is going to draw a legal challenge from the insurance groups,” Kruszewski said. “It probably is still susceptible to legal challenge.”
Other comments about the new rule were also far from caustic.
“Based on our preliminary assessment of the final rule, we note that the Department of Labor made several important changes to the proposal, which are responsive to many” requests by the Investment Adviser Association, the trade group said Wednesday in a statement.
Stifel and the securities industry in general has been working to put into place the new
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