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The Wagner Law Group

The Wagner Law Group is a nationally recognized practice in the areas of ERISA and employee benefits, estate planning, employment, labor and human resources,  investment management and real estate.

 

Established in 1996, The Wagner Law Group is dedicated to the highest standards of integrity, excellence and thought leadership and is considered to be amongst the nation's most exceptional ERISA and employee benefits law firms. The firm has six offices across the country, providing unparalleled legal advice to its clients, including large, small and nonprofit corporations as well as individuals and government entities worldwide. The Wagner Law Group's 27 attorneys, senior benefits consultant and three paralegals combine many years of experience in their fields of practice with a variety of backgrounds. Seven of the attorneys are AV rated by Martindale-Hubbell and six are Fellows of the American College of Employee Benefits Counsel, an invitation-only organization of nationally recognized employee benefits lawyers.  Six of the firm's attorneys have been named to the prestigious Super Lawyers list for 2016, which highlights outstanding lawyers based on a rigorous selection process.

 

 

 

Contact Info

The Wagner Law Group

 

  Integrity | Excellence

  

Boston 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

 

Washington, D.C.

Tel: (202) 969-2800

 

Fax: (202) 969-2568

 800 Connecticut Avenue, N.W.

Suite 810

Washington, D.C. 20006

  

Palm Beach Gardens 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418

   

Tampa

Tel: (813) 603-2959

Fax: (813) 603-2961

101 East Kennedy Boulevard

Suite 2140
Tampa, FL  33602 

  

San Francisco

Tel: (415) 625-0002

Fax: (415) 358-8300

300 Montgomery Street

Suite 600

San Francisco, CA 94104

  

St. Louis

Tel: (314) 236-0065

Fax: (314) 236-5743
100 South 4th Street, Suite 550
St. Louis, MO  63102 

 

 

www.wagnerlawgroup.com

 

 

 

PRESIDENT TRUMP ISSUES

MEMORANDUM DELAYING FIDUCIARY RULE

 

 

 

Friday, February 3, 2017 - The waiting and speculation as to the actions that the Trump Administration might take with respect to the DOL Fiduciary Rule ("Fiduciary Rule") has ended. This afternoon, President Trump issued an Executive Memorandum that delays the implementation of the Fiduciary Rule for 180 days while the DOL conducts a review and determines whether and how it should go into effect. If the DOL determines that the DOL Fiduciary Rule is inconsistent with Trump Administration policy, it may issue for notice and comment a proposed rule rescinding or revising the DOL Fiduciary Rule and the BICE Exemption. The DOL may also take action to stay the litigation currently challenging the DOL Fiduciary Rule and its exemptions. There may be legal challenges to this action that will be brought by proponents of the DOL Fiduciary Rule under various theories, such as a possible violation of the Administrative Procedures Act.

  

One possible effect is that the SEC becomes more involved in the process, so that there would be a uniform definition of fiduciary and a uniform standard enforced by both the DOL and SEC. It is worth noting that a bill known as the Financial CHOICE Act, passed by the House Financial Services Committee in September 2016, proposes the incorporation of the DOL Fiduciary Rule into the Retail Investor Protection Act (a bill passed by the House in 2016) and requires the SEC to take the driver's seat on fiduciary rulemaking.

  

Before the review process has even commenced, it is premature to speculate as to the conclusions that the DOL will reach, although it is highly unlikely that the DOL Fiduciary Rule and related exemptions such as the Best Interest Contract Exemption ("BICE") will survive in their current form, in light of President Trump's clear willingness to dismiss government officials unwilling to conform to his agenda.

  

So...what are the appropriate actions for entities to take that have already devoted considerable time and resources to meeting the April 10th implementation date?

  

Even if the DOL concludes that the best course of action is to return to the rules in effect prior to the enactment of the DOL Fiduciary Rule and BICE, it would not necessarily be the best course of action to undo all of the compliance steps that have already been taken.

  

To the extent that the analysis of the processes, protocols, and procedures necessitated by the DOL Fiduciary Rule have shown areas of inefficiency, there is little reason to discontinue the implementation of these corrections. Examples of this would include the on-boarding process and the documentation that clients are required to review and execute. Also, if reducing the size of the investment platform makes it more efficient and easier to monitor the system, that process should continue as well, as should the training and education of financial advisors with respect to fiduciary responsibility and acting in the best interest of their clients.

  

Some of the actions that have been accelerated by the DOL Fiduciary Rule reflect an industry trend towards an advisory rather than a brokerage based platform. Moreover, the move towards more transparent fee disclosures may reflect new industry standards for "best practices."

  

Focusing more narrowly upon compliance issues,  transition-period documentation should be retained, although its final form may need to be modified to reflect any future DOL action.

  

Finally, it is important to keep in mind that the primary enforcer of violations of the DOL Fiduciary Rule and BICE was to be the private tort bar, rather than the DOL or IRS. Even if BICE is repealed, the tort bar will seek and exploit various causes of action. For example, compensation grids that have the effect, even if unintended, of incentivizing investments in particular funds may be challenged.

  

As the regulatory process continues, we will keep you posted. Stay tuned...

 

 

 

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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.