After years of rule making at the Labor Department produced the strongest fiduciary rules ever, one of the architects of Dodd-Frank reform is asking for a time out.
Barney Frank of Massachusetts has sent a letter to Labor suggesting a pause in the process.
At stake is whether retirement plan advisors -- monitored by ERISA law as well as their own regulators -- need to act in their clients' "best" interest, as DOL now suggests, or simply avoid "conflicts" of interest.
Members of the brokerage community have complained bitterly that the former scenario would force them to abandon the retirement plan advisory business.
Frank wants to make sure that exceptions to the new rule are spelled out, presumably to give these brokers the right to keep charging commissions on these accounts.
As it stands, plan fiduciaries will have to stop charging any kind of commissions for ERISA-governed accounts, according to people like Terry Headley of NAIFA, the National Association of Insurance and Financial Advisors.
The question now is whether a fiduciary code with a lot of exceptions to ensure that the advisor can make money is a good thing or just empty bluster.