Attorney Tanya Hobson-Williams Says the Labor Department Must Be Vigilant in Enforcing the Fiduciary Rule
JAMAICA ESTATES, NY — Attorney Tanya Hobson-Williams of Hobson-Williams, P.C. says that, despite the U.S. Department of Labor’s (DOL) announcement that a long-delayed part of the fiduciary rule will soon go into effect and will be enforced by the agency, the rule has too many loopholes that will allow retirement investment experts to sell products that benefit them, not their clients, and the rule will not be enforced until it is fully implemented, which is scheduled to occur at the beginning of next year.
Part of the fiduciary rule was supposed to go into effect in April 2017, but President Donald J. Trump signed an executive order delaying the enactment and calling for a review. Meanwhile, the DOL announced that part of the rule will go into effect on June 9, although the agency is currently reviewing it and may decide to repeal it. The DOL drew up the rule last year because the agency saw financial professionals setting up their clients with exorbitant retirement portfolios that benefitted themselves, instead of their clients. While the investors paid costly fees and saw little return on investment, their advisers reaped huge commissions and other incentives.
Once the fiduciary rule goes into effect, advisers must charge their clients reasonable fees on their clients’ investments and alert them of any possible conflicts of interest that may arise. In addition, the adviser cannot accept any payments from companies whose products the adviser promotes. However, this part of the provision provides loopholes for advisers, in that they can still sell the investor a product that benefits them and still collect commissions, as long as they can justify why the product is considered beneficial to the client. The second part of the rule is scheduled to go into effect on January 1, 2018 and, according to the DOL, will be fully enforced.
“It is not enough to have part of the rule put in place, especially if the DOL has no intention of enforcing it,” Ms. Hobson-Williams says. “The adviser can still sell an expensive retirement investment product, then make up an excuse to justify it. Meanwhile, the investor will not have enough money saved up for retirement because of the high fees and low returns. The fiduciary rule needs to be fully enforced now, not next year.”
For more information, call 1 (866) 825-1529 or visit www.thobsonwilliamslaw.com.
About Hobson-Williams, P.C.
With offices located in Queens and Brooklyn, the law firm of Hobson-Williams P.C. is comprised of a highly knowledgeable and diligent staff. With over 20 years of experience, the skilled attorneys at Hobson-Williams, P.C. are dedicated to protecting and serving their clients' needs and legal interests, and are committed to providing unparalleled client service. Tanya Hobson-Williams has an active elder law practice assisting senior citizens in obtaining Medicaid for Home Care and Nursing Home Care. She routinely lectures at senior citizen centers, assisted living facilities, law schools and counsels families on a variety of topics of concerns to families caring for the elderly. She is also contracted by the State of New York Employee Assistance Program to provide training to state employees on legal issues that affect them. For more information, call 1 (866) 825-1529 or visit www.thobsonwilliamslaw.com.