An Update on DOL Proposed Retirement Security Rule

By Kathryn Dattomo

I am pleased to share a significant update regarding NAPFA’s recent efforts in advocating for a robust fiduciary standard in the financial advice landscape. On December 13, NAPFA Board Chair Daphne Jordan, CFP^® and Dan Danford, CFP^®, Chair of NAPFA’s Public Policy Committee, had the honor of presenting testimony on behalf of NAPFA and a NAPFA-member firm, in support of the U.S. Department of Labor (DOL) proposed Retirement Security Rule and related Prohibited Transactions Exemptions (“Proposed Rule”). You may read their testimonies here.

Additionally, on January 2, 2024, NAPFA submitted a comprehensive comment letter concerning the Proposed Rule to the DOL.

As staunch advocates for a robust fiduciary standard to apply to all financial advice, NAPFA commends the DOL for taking this pivotal step in establishing a “level playing field” for all retirement advice and retirement investments, and requiring that they all meet the stringent fiduciary standards under the Employee Retirement Income Security Act of 1974 (ERISA).

Today’s financial and retirement landscape has changed immensely since Congress enacted ERISA nearly 50 years ago. The Proposed Rule will strengthen the fiduciary standard Congress intended when it enacted ERISA to protect American retirement savers. It reflects today’s marketplace realities and retirement savers’ pressing needs for fiduciary-level retirement advice. Specifically, NAPFA believes the proposed rule will:

• Close critical regulatory gaps.
• Lead to increased marketplace innovation and the development of improved financial products and services benefitting all retirement savers.
• Promote trust and confidence in retirement financial professionals.

These recent advocacy efforts by NAPFA on this critical issue are crucial for our members, signifying our commitment to elevated fiduciary standards, increased protection for retirement savers, and the promotion of trust and confidence in the financial advice profession. These initiatives align with NAPFA's core principles and contribute to a more secure and transparent financial landscape for all stakeholders involved.

You may have noticed that the Proposed Rule has generated recent media attention and coverage. Some of our advisors have already been contacted directly by reporters, requesting comment. We ask that if you receive any media requests, please forward them to mediaoutreach@napfa.org, and our communications team will provide prompt support, including vetting the media opportunity and determining if the media request is worthwhile pursuing, media training, and talking points.

As we move forward, we will keep you informed of our continued efforts to encourage the DOL to promptly adopt its final rule to improve the retirement security for all hard-working Americans, and I encourage you to stay engaged on this crucial issue. Our collective efforts can make a lasting impact on the financial advice profession.