Thank You to a Small Team That Accomplished Great Things (DOL Fiduciary Rule)

ALL POSTS PRIOR TO 2021 HAVE NOT BEEN REVIEWED NOR APPROVED BY ANY FIRM OR INSTITUTION, AND REFLECT ONLY THE PERSONAL VIEWS OF THE AUTHOR.

Imagine being part of team that, through their strong efforts and tenacity, saved their fellow Americans billions and billions of dollars.

Imagine being part of a team that enhanced the retirement security of tens of millions of Americans.

Imagine being part of a team that, through their efforts, put in place policies that have led to, and will continue to lead to, increased accumulations of capital, providing the fuel for future U.S. economic growth.

The U.S. Department of Labor's Employee Benefits Security Administration is just such a team. With their dedication and perseverance, Asst. Secretary Phyllis Borzi and her team accomplished more than they will ever imagine.

This team vastly improved the disclosures made to plan sponsors and required benchmarking of fees. This step alone saved 401(k) investors billions and billions of dollars, as plan sponsors were alerted to the need to lower fees and costs. And many business owners, large and small, were able to avoid potential future liability in class-action suits as they thereafter adjusted the offerings in their companies' 401(k) plans.

This team then substantially improved the disclosures made to plan participants. More and more 401(k) plan participants began asking questions, in those instances where their plan sponsors had not taken action. This, in turn, led to many more billions of cost savings.

And, for their final act, this team adopted the "Conflict of Interest" Final Rule and its related exemptions, ushering in a strict fiduciary standard of conduct that required all advisors to ERISA-covered plans and IRAs to act with due care, unfettered loyalty to their client's best interests, and utmost good faith.

While this Final Rule remains under attack by Wall Street, both in the courts and in Washington, D.C., already the impacts of the rule have reverberated through the financial services industry. Many asset managers, forced to compete on the basis of the quality of their mutual funds or other products, and not based upon the amount of commissions or revenue-sharing paid to advisors, have already lowered their fees. Large financial services firms have abandoned the always-conflicted commission-based compensation in IRA accounts for fee-based compensation.

As a result of publicity about the Final Rule, consumers have been better trained to seek out - and demand - only fiduciary advisors. Not only for their 401k and IRA accounts, but for all of their investments.

Regardless of the finality of the DOL's Conflict of Interest Rule, its impact will carry forth, and propel the delivery of financial planning and investment advice closer to a true profession - bound together by the fiduciary principle that investment professionals should always keep their clients' best interests paramount.

This is a team that has accomplished a great deal. As the date for the new Administration approaches, some of the members of this team will depart, while others will (hopefully) remain on to carry forth their mission of protecting retirement savers.

So, in these last few days, to Phyllis Borzi, her chief of staff Jane Norman, Deputy Asst. Secretary Jude Mares, Deputy Assistant Secretary for Program Operations Timothy D. Hauser, Office Director (Exemptions) Lyssa Hall, Karen Lloyd of the Division of Class Exemptions, and to many others of the DOL / EBSA staff who worked on the rule and who made major contributions these past eight years during the regulatory processes, I would just like to say ...

      On behalf of the American people ...

      THANK YOU!