Financial groups ask for more time to comment on DOL fiduciary rule

Sixty days is not enough time to respond to a proposed fiduciary rule for retirement plan recommendations, say 18 financial services groups in a letter to the Department of Labor on Wednesday.

Groups including the Financial Services Institute, the Investment Company Institute and the Institute for Portfolio Alternatives wrote to U.S. Assistant Labor Secretary Lisa Gomez asking for an extension of the department's 60-day deadline to opine on the new fiduciary proposal. As now scheduled, comments are due on Jan. 2.

The 18 groups that signed the letter argue that's too little time for so sweeping a proposal. The Biden Administration's proposed "Retirement Security Rule: Definition of an Investment Advice Fiduciary," introduced on Oct. 31, generally would require planners to comply with the fiduciary obligation to look out for their clients' best interests when they are offering advice on retirement plans.

Administration officials argue their goal is to close loopholes that can allow wealth managers to collect high commissions when recommending their clients roll money in a 401(k) plan into an Individual Retirement Account or annuity. By eliminating such "junk fees," they say, they could save middle-class savers tens or hundreds of thousands of dollars over the course of their lives.

The proposal has elicited strong opposition from many corners of the financial services industry. The 18 groups that submitted Wednesday's letter contends that the Biden Administration has had nearly three years to publish a new fiduciary rule for retirement planners since taking office in early 2021. 

Sixty days is not enough time, they say, to formulate a response to a proposal running to nearly 400 pages.

"The Proposed Rule makes significant and unanticipated changes to the current regulatory framework that will require significantly more time for meaningful analysis and comment, and to understand how this proposal would impact access and choice for retirement savers," according to the letter.

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The groups also note that previous attempts to impose a fiduciary standard on retirement planners had allowed more time for submitting opinions. When the Obama Administration, for instance, put forward a fiduciary rule in 2016, commenters were given 75 days initially to respond and then granted a 15-day extension. That previous rule was later struck down by the Fifth Circuit Court of Appeals, leading to the current attempt to put a new one in place.