Labor Department won't enforce investor protection rule(Fiduciary rule) after court decision
Source: CNBC
The Labor Department's decision to put enforcement of the fiduciary rule on hold adds to the uncertainty of the measure's future. Regardless of what happens, retirement savers should be sure to carefully vet their financial advisor and understand exactly how they are paid.
Federal regulators for now are backing off enforcement of an Obama-era rule intended to protect retirement savers. The 5th Circuit Court of Appeals ruled on March 15 that the Labor Department overstepped its authority by creating the so-called fiduciary rule, parts of which went into effect last year. In general, the rule requires advisors and brokers to put their clients' interests before their own when advising on retirement accounts such as 401(k) plans and individual retirement accounts.
"Pending further review, the [Labor Department] will not be enforcing the 2016 fiduciary rule," an agency spokesman said in a statement to CNBC. The department's decision affects all advisors nationwide who have been subject to the rule, not just those who work in the area of the country that the appeals court has jurisdiction over — Texas, Mississippi and Louisiana.
Read more: https://www.cnbc.com/2018/03/19/dol-shelving-enforcement-of-fiduciary-rule-after-court-decision.html
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