Senator Elizabeth Warren Cautions DOL About Mirroring Reg BI When Drafting DOL Fiduciary Rule

Recently, on December 11, 2019 Senator Warren wrote a letter to the  Department of Labor (DOL) to caution them not to permit advisers to provide advice regarding retirement investments  because of potential conflicts of interest when the DOL rewrites the fiduciary rules.  The previously written fiduciary rule by the DOL was in April 2016 but it was later abandoned stemming from a lawsuit.

Warren has called the Securities and Exchange Commission’s Regulations Best Interest (Reg BI) as being “wholly inadequate.”

Here is what she wrote:

“That would be a costly mistake—those standards not only allow broker/dealers to give clients advice that is not in their best interest, but significantly water down the longstanding fiduciary standards that has protected the clients of the investment advisers for decades.”

Warren further says the following about Reg BI:  “is similar to the inadequate FINRA ‘suitability’ standard. Given this ambiguity, it is unlikely that Reg BI will make any significant difference in protecting investors. Reg BI imposes a limited requirement to disclose conflicts. In addition, Reg BI only suggests broker/dealers ‘should consider’ reasonable alternatives for high-priced products, and allows them to still recommend a higher-cost option that pays the broker/dealer more.”


About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>


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