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Questions arise re DOL's delay of broker-responsibility standards

Many of our California readers likely tracked news last year that focused on regulatory changes involving brokers' responsibilities to investors.

The key headline often spotlighting relevant stories featured so-called fiduciary duties. Those are what an adviser owes an investor to demonstrate impartial conduct while giving advice and to ensure that a client's best interests are always promoted.

We duly note in our blog occasionally that brokers often fall short of that standard. Disastrous results can easily accrue for investors when they do.

The Obama administration was clearly concerned with that, enacting a rule last year that imposes a fiduciary designation on more advisers. The regulation also spells out beefed-up standards to ensure that a broker's advice is truly impartial.

That rule has been sharply criticized by the Trump administration.

The administration's disapproval was formally recognized last week when the U.S. Department of Labor announced the delay of the enforcement prong relating to the fiduciary regulation.

The rule was enacted in June last year. The DOL's final rule now pushes its enforcement against brokers out to mid-2019. Regulators say that they need far more time to "evaluate the rule's impact on access to financial information and advice."

Critics of the standard -- the financial industry is understandably a strident opponent -- argue that the rule actually confuses rather than clarifies important matters for consumers. And they add that brokers are unfairly burdened by overly harsh exactions.

A broad-based band of pro-consumer advocates and agencies counters that any such argument is bogus and undermines protections for the investing public.

One commentator states that what rule opponents seek is "a best-interest-in-name-only standard that leaves retirement savers without adequate protection."

We will keep readers posted on any material developments that occur during the delay.

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