Compliance & Regulation

FSI Statement on DOL's Proposed Exemption for Investment Advice Fiduciaries

Encourages alignment with SEC’s Reg BI and preserving investor choice

WASHINGTON, D.C. – Today, the Department of Labor (DOL) released a proposed exemption for investment advice fiduciaries relating to retirement financial advice. This comes after the DOL’s fiduciary rule was struck down by the Fifth Circuit Court of Appeals in March 2018 following a challenge by a coalition of organizations, including the Financial Services Institute (FSI).

“We are thoroughly reviewing the rule proposal. However, we expect the Department heeded the concerns outlined by the Fifth Circuit Court of Appeals and consulted with the SEC to avoid conflicts with Regulation Best Interest (Reg BI),” said FSI President & CEO Dale Brown. “These regulations must work in tandem to prevent conflicting requirements for financial advisors working to diligently comply with the rules and to avoid creating confusion among investors. This will also ensure Main Street Americans have access to the quality, affordable financial advice they need to achieve their financial goals.”

The implementation date for the SEC’s Reg BI is set for Tuesday, June 30, 2020.

“The SEC’s Reg BI achieves increased transparency and investor protection while also preserving their choice of financial advice, products, and services,” Brown said. “We are hopeful that the DOL’s proposed rule strikes the same balance. We look forward to providing comments and working with the Department to achieve a workable standard.”

Highlights Of The DOL Proposal

The proposed exemption offers a new prohibited transaction class exemption for investment advice fiduciaries and is based on an existing temporary policy adopted after the 5th Circuit Court of Appeals vacated the Department’s 2016 fiduciary rule package. The proposal would allow investment advice fiduciaries to give more choices for retirement using Impartial Conduct Standards. Impartial Conduct Standards are a best interest standard; a reasonable compensation standard; and a requirement to make no materially misleading statements.

Since the 5th Circuit’s ruling in 2018, the Securities and Exchange Commission (SEC) has issued a package of advice standards. The standards in the Department’s proposed exemption announced today align with standards of other regulators, including the SEC. Together, the actions of the SEC and the Department of Labor will strengthen retirement security for Americans.

This will also ensure Main Street Americans have access to the quality, affordable financial advice they need to achieve their financial goals...

The proposed exemption also expresses the Department’s views on when rollover advice could be considered fiduciary advice under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code.

The Department is also taking the ministerial action of amending the Code of Federal Regulations to implement the 5th Circuit’s order. The court’s order had the effect of reinstating the Department’s 1975 regulation defining who is an investment advice fiduciary under ERISA and the Code, commonly known as the “five-part test.” The court’s order also had the effect of reinstating the Department’s Interpretive Bulletin 96-1 regarding participant investment education.

“Today’s proposed exemption would give Americans more choices for investment advice arrangements, while protecting the retirement savings of American workers,” U.S. Secretary of Labor Eugene Scalia said. “The exemption would add to the tools individuals need to make the right decisions for their financial future.”

Read more here.




About the Financial Services Institute (FSI): The Financial Services Institute (FSI) is the only organization advocating solely on behalf of independent financial advisors and independent financial services firms. Since 2004, through advocacy, education and public awareness, FSI has successfully promoted a more responsible regulatory environment for nearly 100 independent financial services firm members and their 160,000+ affiliated financial advisors – which comprise over 60% of all producing registered representatives. We effect change through involvement in FINRA governance as well as constructive engagement in the regulatory and legislative processes, working to create a healthier regulatory environment for our members so they can provide affordable, objective advice to hard-working Main Street Americans. For more information, please visit



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