Displaying items by tag: DoL

A coalition of top financial planning organizations is urging the Department of Labor to finalize its proposed Retirement Security Rule, which would require financial professionals to act in clients' best interests when giving retirement advice. 

In a joint letter to Labor Secretary Lori Chavez-DeRemer, leaders from the CFP Board, FPA, NAPFA, and XY Planning Network argued that the rule fills critical regulatory gaps left by standards like the SEC’s Reg BI. The letter cited research showing that 92% of Americans expect fiduciary advice, even though current laws don’t always guarantee it—especially for one-time retirement guidance. 

The organizations pushed back on claims that fiduciary rules restrict access to advice, pointing to firms like XYPN that serve younger, mass-affluent clients without asset minimums. The coalition also praised the rule’s efforts to modernize outdated protections, especially regarding insurance products that currently fall outside federal fiduciary oversight. 

Finsum: Financial advisors should watch these updates because they will affect their practice management. 

On May 28, 2025, the U.S. Department of Labor rescinded its 2022 guidance that had discouraged 401(k) plans from offering cryptocurrency investments, signaling a return to investment neutrality. 

The original 2022 Release had raised concerns in the benefits industry by implying heightened fiduciary scrutiny for crypto, leading to legal challenges, though it was ultimately deemed nonbinding. Despite lacking legal force, the 2022 guidance effectively chilled crypto’s inclusion in retirement plans, with GAO data showing minimal adoption and crypto exposure limited mostly to self-directed brokerage windows. 

Under the Trump administration, broader federal policy shifted to encourage digital asset innovation, with agencies like the SEC relaxing enforcement and facilitating clearer frameworks for crypto. While the Labor Department has not explicitly endorsed crypto in 401(k)s, it now stresses fiduciaries must evaluate all investment options contextually and prudently. 

Finsum: Whether this neutral stance extends to other investment types or persists beyond the current administration remains an open question.

The Supreme Court's recent decision to overturn the "Chevron deference" doctrine is expected to significantly impact the financial industry, creating greater regulatory uncertainty. This doctrine, based on a 1984 precedent, previously allowed government agencies to interpret the laws they administer with substantial autonomy. 

Experts like Prof. Richard Lazarus from Harvard Law School anticipate that the ruling will disrupt the legal system, as much of lawmaking over the past 40 years relied on Chevron deference. Regulatory agencies such as the SEC, Federal Reserve, OCC, CFPB, and CFTC will now need to draft rules more carefully to align with specific statutory language. 

Despite the potential for less regulation, large banks and industry groups have largely remained silent on the decision, though the American Bankers Association has expressed that the ruling underscores the necessity for federal agencies to operate within their statutory limits. 

Finsum: We’ll see how tightly regulation becomes as an issue leading into falls major election.

The DOL's new Retirement Security Rule mandates that advisors handling retirement savings follow a fiduciary standard, prioritizing clients' best interests. Effective September 23, 2024, with a 365-day transition period, this rule could help clients save up to $5 billion annually by ensuring unbiased advice. 

The rule addresses issues with rollovers and commissions, aiming to close previous regulatory loopholes. While some industry groups plan to challenge the rule in court, many investment advisors already operating under fiduciary standards support it.

The CFP Board applauds the rule, noting that 92% of Americans expect fiduciary-level retirement advice. This rule intensifies the debate between fee-only advisors and commission-based professionals regarding conflicts of interest.

Finsum: We don’t expect this rule to have a huge impact on advisors, but future regulation will drastically be impacted by November 2024. 

Deferred annuity sales increased by nearly 19% in the first quarter compared to the same period last year, according to Wink, Inc. This surge sets the stage for annuities to potentially exceed $400 billion in sales this year. 

Sheryl Moore, CEO of Wink, attributes this growth to the upcoming fiduciary rule implementation on September 23, which is driving a "fire-sale mentality" among producers and carriers. The new Retirement Security Rule will extend the Department of Labor's fiduciary duty to most annuity sales. 

Total first-quarter annuity sales, including immediate and deferred income annuities, reached $105.7 billion, with notable performers like Athene USA leading deferred annuity sales. Wink also noted strong performance in various annuity types, with record sales in indexed and structured annuities, indicating robust market activity ahead of regulatory changes.

Finsum: This spike could be sustained by falling interest rates that increase annuity demand.