“Given that the Department’s proposed class exemption provides needed regulatory alignment with the Securities and Exchange Commission’s already effective (as of June 30) Regulation Best Interest, timely completion of the Department’s initiative is imperative for the financial industry and the investing public,” David T. Bellaire, FSI’s executive vicee president and general counsel, said in a letter he sent to the DOL.
One long-time consumer advocate in Washington, D.C., who requested anonymity doesn’t believe the securities industry has anything to worry about. “Biden was one of the most pro-business, pro-corporation Democrats in Congress for 40 years. There’s a reason corporations and banks headquarter in Delaware. It is hard to imagine Biden taking on Wall Street,” he said.
Barbara Roper, director of investor protection at the Consumer Federation of America, disagreed. “Under a Biden administration, I would expect revisions to the DOL advice rule, the SEC’s Regulation Best Interest, and the Advisers Act fiduciary standard to incorporate a true best-interest standard and meaningful restrictions on the most harmful conflicts of interest,” Roper said.
Roper said she’d also expect a Biden administration to work to close loopholes in the definition of fiduciary investment advice under ERISA, making clear that all rollover recommendations would be held to a fiduciary standard.
“I would also expect [the] SEC to re-examine conflicts of interest in both the broker-dealer and investment advisor business model and limit or ban those that are most harmful to investors. And I would expect [the] DOL to incorporate those restrictions in its advice standard,” she said.
Roper said that under a Biden presidency, she’d expect to see “coordination between the SEC and DOL on this issue, but with an eye toward protecting investors, rather than protecting industry profits.”