From: Jeff Carter, RICP, CSA, RFC [mailto:jeffdcarter1@gmail.com] 

Sent: Saturday, May 09, 2015 11:09 PM

To: EBSA, E-ORI - EBSA

Subject: Proposed Fiduciary Duty Rule Comment

May 08, 2015

The Honorable Thomas E. Perez

Secretary

U.S. Department of Labor

200 Constitution Avenue, N.W.

Washington, D.C. 20210

Re: Department of Labor's Proposed Fiduciary Duty Rule

Dear Secretary Perez:

I am writing to address issues raised by 30 members of the New Democrat Coalition ("NDC") in 

a letter to you dated January 13, 2014 ("Letter"). The Letter focuses on the fiduciary duty rule 

that the Department of Labor ("DOL") intends to re-propose later this year 2015.

This rule will update and expand the definition of the term "fiduciary'' under the Employee 

Retirement Income Security Act of 1974 ("ERISA").

The last 25 years I have served the American middle market consumer as a Financial 

Professional.

Rhetoric, spin, and self-interest aside, I believe the following concerns must be addressed prior 

to any final fiduciary duty ruling is re-proposed by the DOL.

The DOL Fiduciary Proposal as currently written is unworkable for retirement savers of the 

middle market (the majority of consumers in America) and their professional advisors.

As the current fiduciary duty rule is proposed it would fundamentally change the way advisors 

do business, disrupt long-established client-advisor relationships, increase costs for advisors and 

consumers and prevent advisors from providing retirement investors with certain types of 

important advice and services.

The proposed regulations would certainly reduce the availability of services and advice as some 

advisors would either shift their practices away from the middle market retirement sector or 

would drop middle to lower market consumers who would not be able to afford the increased 

costs.

Consumers may find themselves unable to continue working with advisors they know and trust 

and may be unable to receive advice in a number of common, yet complicated, retirement 

income planning situations. Certainly the proposed rule would drive up the cost of retirement 

investment advice and services.
The Department of Labor current proposed changes would require financial professionals to 

present a complicated and potentially confusing “best interest contract” asking these clients to 

sign. The contract would require advisors to act in the best interest of the retirement investor (as 

defined by ERISA), adopt written policies to mitigate conflicts of interests (such as a policy 

creating only level commissions that do not vary based on which products the advisor 

recommends), and complete increased disclosure paperwork with each transaction.

The proposed changes would also require advisors to complete a (potentially lengthy) annual 

disclosure document for each client detailing all transactions, fees and expenses, and the 

advisor’s direct and indirect compensation. On top of that, financial institutions would have to 

maintain updated web sites that show the amount of compensation advisors would receive for 

each of its product offerings. This would be particularly burdensome for smaller firms with 

limited resources. They may choose to exit the market, resulting in decreased competition and 

consumer choices.

If these proposed changes as currently written are adopted, advisors who continue to serve 

retirement investors would face restrictions making it difficult or impossible for them to perform 

some services clients have grown to expect from them. For example, the proposed rule would 

prohibit advice on plan distributions, including individual retirement account rollovers.

Any advisor affiliated with a plan service provider, such as an insurance company, would not be 

allowed to sell a variable annuity from that provider. The advisor would still be allowed to sell 

fixed-rate annuities, but this would obviously limit the clients’ choices.

It is unclear how the advisor would be able to work in the best interest of the client under this 

situation. What if a variable annuity product would be in the best interest of a client but the rule 

prohibits the advisor from selling that product? Similarly, would an advisor not licensed to sell 

securities violate his or her fiduciary duty simply by limiting advice to non-securities solutions? 

The rule is unclear on this.

What is clearer is that the rule would limit consumers’ options.

I implore you to slow this process down while analyzing the long-term impact this fiduciary duty 

proposal would have on 76+ million baby boomers (the majority of whom represent the middle 

market consumers in America).

With Much Respect and Very Best Personal Regards,

Jeff Carter, RICP

Retirement Income Certified Professional

888-252-7941 | I’ve spent the last 25 Years with a front row seat to see firsthand the challenges 

facing today’s retirees.