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Related: About this forumStates to Trump: Leave Retirement Rule Intact or We'll Act
Federalism!
The article is in this morning's paper, on page B1 above the fold. This is in the "Business & Finance" section.
States are stepping in as the fiduciary rule is in the process of being watered down:
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States to Trump: Leave Retirement Rule Intact or Well Act
Legislatures, regulators across country move to shore up investor protections as fiduciary rule is reviewed
By Lisa Beilfuss
Sept. 12, 2017 5:30 a.m. ET
The controversy over a rule restricting conflicted retirement advice is shifting to states, which are moving to bolster investor protections out of concern the Trump administration will weaken the federal provision. ... In recent months, the governors of Nevada and Connecticut signed bills to expand or amplify fiduciary requirements for brokers. Legislators in New York, New Jersey and Massachusetts have introduced similar bills. And several other states, including California, have indicated interest in exploring such requirements.
Unveiled last year, the Labor Departments fiduciary rule requires brokers to act in the best interests of retirement savers rather than sell products that are merely suitable and potentially more lucrative for the brokers. Financial-industry leaders have fought against the Obama-era regulation, saying it would limit investment options, elevate costs and potentially cut off low-balance customers from some forms of professional advice.
The states efforts come as the fate of the federal rule, which partially went into effect in June, remains in question. President Donald Trump shortly after taking office ordered the Labor Department to re-evaluate the economic impact of the rule with an eye toward repeal or revision. The states in many cases are looking to go beyond the federal rule, which governs advice on tax-advantaged retirement savings, and instead require that brokers uphold a fiduciary standard across all accounts.
....
This could become a bit like Frankenstein, said George Gerstein, an attorney at Stradley Ronon Stevens & Young LLP who represents financial-services firms. If states go their own way on this, it could become a nightmare. .... Observers say that while some firms could decide to leave Nevada to avoid an onerous regulation, they cant ignore the most populous state. If California enacts its own fiduciary rule, experts say it could effectively render the Labor Departments rule mootwhatever the outcome of the re-evaluation. ... If California acts, this takes on a life of its own, said Mr. Gerstein.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Legislatures, regulators across country move to shore up investor protections as fiduciary rule is reviewed
By Lisa Beilfuss
Sept. 12, 2017 5:30 a.m. ET
The controversy over a rule restricting conflicted retirement advice is shifting to states, which are moving to bolster investor protections out of concern the Trump administration will weaken the federal provision. ... In recent months, the governors of Nevada and Connecticut signed bills to expand or amplify fiduciary requirements for brokers. Legislators in New York, New Jersey and Massachusetts have introduced similar bills. And several other states, including California, have indicated interest in exploring such requirements.
Unveiled last year, the Labor Departments fiduciary rule requires brokers to act in the best interests of retirement savers rather than sell products that are merely suitable and potentially more lucrative for the brokers. Financial-industry leaders have fought against the Obama-era regulation, saying it would limit investment options, elevate costs and potentially cut off low-balance customers from some forms of professional advice.
The states efforts come as the fate of the federal rule, which partially went into effect in June, remains in question. President Donald Trump shortly after taking office ordered the Labor Department to re-evaluate the economic impact of the rule with an eye toward repeal or revision. The states in many cases are looking to go beyond the federal rule, which governs advice on tax-advantaged retirement savings, and instead require that brokers uphold a fiduciary standard across all accounts.
....
This could become a bit like Frankenstein, said George Gerstein, an attorney at Stradley Ronon Stevens & Young LLP who represents financial-services firms. If states go their own way on this, it could become a nightmare. .... Observers say that while some firms could decide to leave Nevada to avoid an onerous regulation, they cant ignore the most populous state. If California enacts its own fiduciary rule, experts say it could effectively render the Labor Departments rule mootwhatever the outcome of the re-evaluation. ... If California acts, this takes on a life of its own, said Mr. Gerstein.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Previously:
Fiduciary rule officially delayed 18 mos, but more interesting: new exemption coming & enforcement tool likely nixed
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States to Trump: Leave Retirement Rule Intact or We'll Act (Original Post)
mahatmakanejeeves
Sep 2017
OP
elleng
(130,126 posts)1. YES Federalism!
Fortunately there are some states (and governors) with guts/strength/wisdom to do the right thing.