Tim Hauser, the program operations chief of the Employee Benefits Security Administration, said Monday that advisors will love the Department of Labor’s coming guidance on the fiduciary rule for pension plan advisors.
He said the guidance would start coming out soon, though he would not say exactly when or what parts of the rule would be addressed first.
He noted that while the rule is final, plans on how to put it into effect are continuing to be developed.
“We’re still talking to people on how to operationalize the requirements,” said Hauser.
Speaking at an IMCA conference in Washington, D.C., he warned that advisors might be tempted to talk themselves into the myth that what is always good for them is always good for clients, but added: “It’s a recipe for trouble.”
The department is moving ahead in spite of Republican efforts in Congress to bar the DOL from spending money on enforcing the new rules. Last week, the House Appropriations Committee voted to ban that spending when the new federal fiscal year starts on October 1.
Plan advisors are required to act as fiduciaries starting in April 2017 and to have fully implemented the rules by January 1, 2018.
Hauser said an advisor can describe the attributes of any investment to his or her heart’s content, but for the fiduciary rule’s obligations to kick in, there must be a recommendation.
One executive doesn’t think the costs will be great. Ray Ferrara, the former chairman of the board of directors for the CFP Board of Standards and the current chief of ProVise, said during a panel discussion at the IMCA event that the fiduciary rule won’t impose significant costs on advisory firms like his.
But Martine Lellis, the COO of Sullivan Bruyette Speros & Blayney in suburban Washington, D.C., said the rule would cost her firm money through lost opportunities for more business, a sentiment echoed by David Eisen, a senior vice president at UBS.