FSMA Applauds the U.S. Department of Labor’s Intent to Curb Conflicts of Interest Engaged in by Vendors to Retirement Plans
During remarks at the Financial Services Roundtable on March 12, 2014, Phyllis Borzi, the assistant secretary of the Employee Benefits Security Administration, said “”Whatever business model you want to use is perfectly fine with us, as long as it is not a business model that is entirely based on conflicts of interest.”
The department has been working now for several years to overhaul its rules governing how advisors provide advice to clients in workplace retirement plans such as 401(k)s and individual retirement accounts. Borzi wants these advisors to be held to a higher “fiduciary” standard, meaning they must put their clients’ interests ahead of their own.
FSMA is eager to see the enforcement of the “client first” requirement of such a rule change applied to all vendors.