PUBLIC SUBMISSION

As of: 7/21/15 

Received: July 21, 2015

Status: Pending_Post

Tracking No. 1jz-8k3w-r6re

Comments Due: July 21, 2015

Submission Type: Web

Docket: EBSA-2010-0050

Definition of the Term ‘‘Fiduciary’’; Conflict of Interest Rule—Retirement Investment Advice; 

Notice of proposed rulemaking and withdrawal of previous proposed rule.

Comment On: EBSA-2010-0050-0205

Definition of Fiduciary; Conflict of Interest Rule-Retirement Investment Advice and Related 

Proposed Prohibited Transaction Exemptions; Hearing and Comment Period Extension

Document: EBSA-2010-0050-DRAFT-2618

Comment on FR Doc # 2015-14921

Submitter Information

Name: Jathan McDowell

General Comment

American investors need reliable education, affordable retirement advice 

and clear and easily understood disclosure. 

Unfortunately, the current draft: 

- Prohibits an advisor from providing advice to plan sponsors under a 

commission arrangement - meaning that the employer must pay using a 

fee-for-service arrangement.

- Narrowly defines investment education, which will limit the assistance 

advisors can provide without triggering fiduciary obligations.

- Does not allow advisors to receive third party compensation when 

advising plan participants on distribution options. 

- Creates an inoperable Best Interest Contract Exemption (BIC) - a new 

exemption that would allow otherwise prohibited compensation such as 

commissions and 12b-1 fees, but is complicated, confusing to consumers, 
costly and in some respects, impossible to comply with.

- Limits third party for variable annuities and fixed annuities with 

different rules depending upon whether in an IRA or in other qualified 

plans.

In order to make the proposal workable for savers and retirees, I urge the 

Department to make the following changes: 

- Permit third party compensation models when working with businesses that 

sponsor retirement savings plans. 

- Broaden the education provision, especially with respect to the timing 

of an advice conversation proceeding to the mention of specific investment 

products. Advisors and consumers must be able to discuss together 

specific investment choices prior to the point at which a recommendation 

is made and a specific choice is contemplated. 

- Clarify BIC exemption language to encompass advice on plan distributions 

and rollovers. It must be clear that advice in these situations can be 

compensated by commissions, 12b-1 fees, and fee sharing if the terms of 

the BIC exemption are satisfied. 

- Simplify the contract requirements and eliminate the burdensome data 

retention and cumulative disclosure requirements. The contract should be 

executable once a full review of the client's circumstances, goals, 

objectives and financial options has been discussed and a decision has 

been made as to a course of action. 

- Resolve the conflict between the rules in its BIC PTE proposal and 

SEC/FINRA rules, address the parties-in-interest/self-dealing rule issues 

that particularly impact fixed and variable annuities, explicitly allow 

proprietary products, and captive as compared to independent advisors. 

I urge the Department of Labor to re-write this unworkable rule to achieve 

our mutual goal of an effective best interest standard that will retain 

access to affordable professional advice. 

Sincerely,

Jathan McDowell