The Trump Labor Department on April 5 sent the Office of Management and Budget its final rule requesting a 60-day delay for the Obama fiduciary rule. Competitive Enterprise Institute Senior Fellow John Berlau praised the requested delay:
Delaying the Obama fiduciary rule by 60 days will be a big reprieve for savers from a regulation that threatens access to financial guidance and investment choices. Not only is this delay a potential first step to repeal this paternalistic and unnecessary rule, the delay is needed to protect financial firms and investors from exposure to new lawsuits. If the rule were to apply for even one day, trial lawyers could launch hundreds of lawsuits claiming that plans did not comply with an arbitrary definition of “best interest.”
Berlau has previously spoken out against the fiduciary rule, which labels a vast number of financial professionals as “fiduciaries” and imposes a mandate to invest in savers’ “best interest.” But that “best interest” requirement amounts to an ill-defined obligation that exposes financial professionals to uncertain political and legal problems. That will cause financial service providers to restrict investment choices and look for a “safe harbor” of investments government would bless.