A rule that aimed to raise investment-advice protections for retirement savers has died in court — now, effectively, for the second time.
Some legal experts said the outcome could lead unwary retirement investors to receive investment advice that’s not in their best interests, and cause confusion about the legal obligations that brokers, insurance agents and other financial intermediaries owe to retail investors.
The undoing of the so-called “fiduciary” rule, issued by the Biden-era Department of Labor, is a déjà vu of sorts, mirroring the outcome for a similar rule issued about a decade ago by the Obama administration, according to experts in retirement law.
The Biden and Obama rules sought to crack down on conflicts of interest among brokers, advisors, insurance agents and others by creating a higher legal bar for their advice to retirement investors.
However, the Democrats’ rules were ultimately scuttled after the Trump administration — in its first and second terms, respectively — declined to keep defending them following losses in court battles helmed by financial companies.
