May 23, 2017
Washington, DC—The National Consumers League (NCL) is applauding the conclusion by U.S. Department of Labor Secretary Alexander Acosta that there is a “no principled legal basis” for further delaying implementation of the core provisions of the Department’s conflict of interest (or “fiduciary”) rule, about which Acosta wrote in an op-ed in the Wall Street Journal. As a result, the provisions of the rule that close loopholes in the definition of fiduciary investment advice will become applicable as scheduled June 9. Also newly applicable will be the impartial conduct standards requiring those operating—with what would otherwise be an impermissible conflict of interest—to act in their customers’ best interests, charge reasonable fees, and avoid misleading statements.
Every year, retirement savers lose $17 billion because they receive bad advice from financial advisers—such as by being steered into investments that provide larger payments to the adviser but lower returns for the saver.
“The Department of Labor under President Trump and Secretary Acosta has been pressured on many fronts to undo this critically important rule that requires that investment advisors operate in the best interests of the investor. We welcome this news that DOL sees no further legal basis for delay after many months of indecision,” said Sally Greenberg, NCL’s executive director.
“Honest firms and investor advocates agree that working in the best interests of clients and avoiding conflicts of interest is good for industry and good for consumers. We urge the Trump Administration not to consider any further delays in implementing the fiduciary rule, which is backed up by very strong regulatory record at DOL and has been upheld in previous court cases,” said Greenberg.
About the National Consumers League
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.