Next DOL fiduciary proposal under attack prior to release

investmentnews.com:

The Department of Labor got a taste over the weekend of the fierce opposition it will encounter as it tries again to strengthen investment advice rules for retirement accounts.

Late Friday, the agency sent a proposal for review to the Office of Management and Budget that “would amend the regulatory definition of the term fiduciary … [to] more appropriately define when persons who render investment advice for a fee to employee benefit plans and [individual retirement accounts] are fiduciaries.”

It’s the DOL’s latest attempt to impose heightened advice standards for retirement savers, an effort that has been underway for more than a decade. An Obama administration fiduciary rule proposed in 2016 was struck down two years later by a federal appeals court that ruled in favor of financial industry opponents who filed a lawsuit against the regulation. A less stringent Trump administration version of the rule also drew industry concern.

The Biden administration DOL let the Trump rule stand but is now proposing to cast the fiduciary net wider so it covers more financial advisors to retirement plans. The text of the proposal won’t be made public until the DOL releases the proposal following the OMB’s review, which could take several weeks to a couple months.

Even before the details of the proposal are known, the insurance industry attacked the proposal on Saturday.

“DOL is plowing ahead with its latest damaging proposal despite the fact that federal courts have repeatedly rejected their efforts to expand the fiduciary rule in recent years, as well as the extensive body of research showing that this type of proposal will significantly harm lower and middle-income workers and exacerbate the wealth gap for Black and Latino