(Reuters) - The U.S. Department of Labor will, once again, delay plans to unveil a revised proposal for a rule aimed at beefing up standards of conduct for brokers who advise on retirement plans and individual retirement accounts, according to its agenda.þþThe Labor Department, which has jurisdiction over retirement plans, including IRAs, will repropose its controversial rule in January, 2015, instead of in August 2014, it said in a notice on Tuesday.þþIt is the most recent delay in a long-running struggle that pits the department against various industry groups.þþThe plan would require advisers to retirement plans and IRAs to act as fiduciaries, or in their clients' best interests.þþThe department is concerned that advisers may be swayed to recommend securities, such as certain mutual funds, because of special compensation their brokerages receive for promoting them. Those recommendations could be costly to investors, the department has said.þþIn 2012, the Labor Department withdrew an initial rule it had proposed in 2010 after industry groups and lawmakers expressed concerns about costs of the rule to the industry. There are also questions about whether the rule would clash with a separate fiduciary proposal under discussion at the U.S. Securities and Exchange Commision.þþInvestor advocates have been pushing the SEC to require brokers to act as fiduciaries, or in their clients' best interests, when giving advice to their customers. Investment advisers, a different type of financial adviser, must already act as fiduciaries. Brokers must now give advice that is ÿsuitable,ÿ based on factors such as a client's risk tolerance or age. But ÿsuitableÿ investments are not always the ÿbestÿ or most cost-effective for the investor, consumer advocates say.þþThe securities industry has said it supports a fiduciary standard for both brokers and investment advisers. But the industry wants a new fiduciary standard that would streamline regulations for both types of advisers and allow it to maintain certain business practices, such as selling funds that are branded with a brokerage's name.þþSome legislators and the securities industry have called for the Labor Department and SEC to coordinate the plans they are developing. That would avoid problems such as regulations that contradict.þþÿPremature actions by the (Labor Department), whether now or in January, could undermine the SEC’s work to improve upon the standard of conduct owed by broker-dealers and investment advisers to retail clients,ÿ said Kenneth Bentsen, Jr., president and chief executive of the Securities Industry and Financial Markets Association, in a statement late on Tuesday.þþA Labor Department spokesman did not immediately respond to requests for comment about the reason for the delay.þþA U.S. Department of Labor official spoke publicly about the revised plan in March, saying it will both minimize conflicts and still permit brokers to earn a living.þþ(Reporting by Suzanne Barlyn; Editing by Sofina Mirza-Reid)þ
Source: NY Times
