Democrats ask U.S.
brokerages if they support delay to fiduciary rule
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[January 20, 2017]
YORK (Reuters) - 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
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.
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U.S. Senator Elizabeth Warren (D-MA) questions Wells Fargo CEO John
Stumpf (not pictured) during his testimony before a Senate Banking
Committee hearing on the firm's sales practices on Capitol Hill in
Washington, U.S., September 20, 2016. REUTERS/Gary Cameron
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
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
(Reporting By Elizabeth Dilts; editing by Diane Craft)
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