NEW YORK One of the strongest proponents of the
Democrats on financial regulation demanded on Thursday that big
brokerages come clean about whether they would support delaying
a new rule by the U.S. Department of Labor if President-elect
Donald Trump’s administration makes a move to do so.
The Labor Department’s fiduciary rule, set to take effect in
April, would require brokers to provide investment advice that
is in the best interest of retirement savers.
Though the rule’s start date is less than three months away, Senator Elizabeth Warren wrote that she is “troubled” by
reports that Trump’s administration has plans to delay the
regulation as early as Monday.
Trump has not commented on the rule publicly, but his
assistant Anthony Scaramucci has said the administration would
work to delay or repeal the rule.
Warren, a Democrat from Massachusetts, said she sent the
letter to 33 wealth management firms including Morgan Stanley
, Raymond James Financial and Bank of America Merrill Lynch, because they have already spent millions
to be compliant with the rule.
The letter asked the firms if they planned to reverse the
changes they had made to become compliant, including for some
lowering fees on certain products, if the Trump administration
delayed the rule.
A Morgan Stanley spokeswoman said the bank had received the
letter and was reviewing it. Bank of America and Raymond James
did not respond to requests for comment.
Last year, Merrill Lynch said it would stop offering
retirement services that paid advisers commissions, eliminating
the possibility that advisers might push one investment product
over another based on the commission they could earn.
Morgan Stanley and others have opted to keep
commissions-paying accounts, but have strengthened training and
compliance standards to meet the rule’s higher standards.
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