Erin Sweeney Comments on Labor Department's Fiduciary Rule Proposal in Compliance Week

"Fiduciary Duty Rules Poised to Redefine an Industry"
Compliance Week

Erin Sweeney commented on the U.S. Department of Labor's (DOL's) fiduciary rule proposal. The proposal has the investment world on high alert and the rules are expected to be finalized before President Obama leaves office. The rulemaking process is shaping up to be "a complete disaster for the market," and the fast-approaching end of the Obama Administration has meant a "take-no-prisoners and get-it-done process," Sweeney said. "Right now, they are going to put this into play in eight months, and everyone in the industry is saying they can't do it," she said regarding the proposal. She calls the effort "a watershed regulation that changes the fundamental basis of how retirement plan services are offered."

The question now is how firms should respond to rules that seem inevitable. The DOL, Sweeney said, suggests that companies start shaping compliance efforts now. "I don't know how that is possible. I have told my clients that it would be irresponsible to try to set your systems in place until we have [an] idea what the Labor Department is going to come out with," she added. "I can't imagine how you would advise putting any systems in place when we have no idea what the Labor Department is going to make this look like. My advice to clients is to sit back and realize you are going to have a sprint ahead of you. As soon as that new rule comes out, we are going to have to do the best we can and the Labor Department is not a fan of good faith compliance."

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