U.S. Department of Labor regulations that would extend the fiduciary standard to a larger group of people advising on retirement plans are on hold for now, but they may not be dead, according to those following the fate of the proposals.

The DOL had proposed extending the fiduciary standard so that broker-dealers and their representatives would be forced to meet its more stringent requirements. The rules had been written, and many broker-dealer and lawyers anticipated a decision by the end of the year.

But there were vehement objections from some broker-dealers. They questioned the need for the new regulations and the cost of implementing them. They complained that some of the terms of the proposal were not well enough defined, and that it would be hard to adhere to them.

Broker-dealer representatives pointed to the high administrative costs for ensuring compliance with fiduciary standards. Broker-dealer reps must currently meet only a suitability standard to show that advice given to employers for retirement plans or plan participants is suitable for their needs. Fiduciary standards, on the other hand, are much stricter, and require advisors to work in a client's best interests.

B-D reps have also complained they won't be able to advise retirement accounts if they have to meet fiduciary standards-that they would either have to develop a new business model or drop the business entirely, said Bradford Campbell with the law firm Drinker Biddle in Washington, D.C. Campbell is the former head of the Employee Benefits Security Administration, which oversees these types of regulations within the Department of Labor.

"There was bipartisan opposition to the proposed regulations," said Campbell. If broker-dealer representatives cannot sell their own products to retirement plan sponsors, they may not be able to do business as they currently do and they would not receive commissions, he said.

Some broker-dealers would not let their reps work with retirement plans if they could not sell products to them, said Adam C. Pozek, a partner at DWC Erisa Consultants LLC in Rosemount, Minn.

The SEC is also considering changes holding brokers to fiduciary standards. But both sets of regulation are on hold, likely until after the November elections, say industry insiders.

While it is important to provide those protections as quickly as possible, it is also important to take the time needed to get it right, says the DOL, which says no action is expected before the end of the year.

"Conventional wisdom has it that the fate of the DOL rule may depend on the outcome of the election," Pozek said. Republicans tend to favor fewer regulations, and if they are successful in November, the rule may die a natural death. However, if President Obama is re-elected, the rule may be revisited.

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