For many years many brokers and insurance agents were permitted to give investment advice to their clients without revealing that they had a conflict of interest with respect to the investments they were recommending. This practice was costing investors $17 billion dollars per year. See here.
President Obama’s Labor Department ruled on April 6, 2016 (see here) that these brokers, insurance agents, and others could no longer engage in these shady practices, but had to put their client’s interests above their own. They could not recommend investments that were not in the client’s best interests and they had to reveal conflicts. See here.
It is a sad commentary on the brazen corruption of big business that this rule has been fought against and delayed. How dare the Obama administration take away the right to hoodwink investors? After a considerable delay in the Obama administration, President Trump has done his best to delay the provisions even further. In March, 2017, Trump’s Department of Labor received 193,000 comment letters during a 15 day comment period. 178,000 opposed a delay. Yet, full implementation has been delayed until July 1, 2019. See here.
Meanwhile the Fifth Circuit Court of Appeals in Chamber of Commerce (perhaps the Chamber might consider changing its name to Enemy of the People) v. Department of Labor has ruled that the Department has exceeded its authority in requiring a broader class of professionals to act like fiduciaries instead of exploiters, and the Department of Labor has stated that it will not enforce the rule pending appeal. See here.
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