Questioning the Fiduciary Expansion
Posted on Fri, Sep 16, 2011
Congressman Barney Frank Questions the New Fiduciary Proposal
Last Thursday Congressman Barney Frank (D-Massachusetts) wrote the DoL requesting they “withdraw and re-propose” their proposed expansion of the fiduciary definition. Frank conceded that the ERISA rules may need to be updated but added, “it is important to do this in a way that does not have adverse effects on the choices available to consumers, municipalities and pension plans, among others.”
Frank’s request comes on the heels of criticism from the Securities Industry and Financial Market Association and the Investment Company Institute. Their testimony in March highlighted their view that fiduciary status should only be attached to a genuine advisor relationship and simply selling an investment product cannot be a fiduciary act.
Frank’s position on the matter is of particular significance as he is the Ranking Member of the House Financial Services Committee.
