It continues to be a mystery to me why the financial services industry is set against the fiduciary standard. Removal of conflicts of interest can only help individuals reach their long term goals.

EBSA received many complaints about the first proposed rule including IRAs. Brad Campbell, the former head of EBSA who’s now counsel with the law firm Schiff Hardin in Washington, has been urging Borzi to repropose the fiduciary rule for some time. He told AdvisorOne in a previous interviewthat if the DOL applied its fiduciary rule to IRAs, “broker-dealers who are selling IRAs are going to have to change the way they operate and the way they get paid in connection with those IRAs.” Given the fundamental difference between IRAs and 401(k)s, Campbell continued, there is a valid question in: “Is DOL the right entity to regulate that [IRA] activity, or should this policy really be coming out of Treasury or the SEC?”Borzi argued at an industry conference earlier this year that there has been a “seismic shift” of boomers’ money from 401(k)s to IRAs, and that “the level of protection in the IRA marketplace for people against financial conflicts of interest is of concern.” This lack of protection, she said, “is one of the main reasons” EBSA has included IRAs in its fiduciary rule proposal.

She went on to say that she’s “mystified” by critics who say if the proposed rule were finalized in its current form brokers would be forced out of the IRA marketplace “because they couldn’t get commissions.”

This issue will not go away.

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