Stifel CEO Finds Pleasant Surprises in Final DOL Fiduciary Rule
Two financial services company executives gave mixed reviews to the final versions of the Labor Department’s new fiduciary rule regulations in conversations with securities analysts last week.
The department posted a draft in October 2023 and published a final version of an investment advice fiduciary definition, along with guidelines applying the definition to investment advisors and independent insurance agents, in the Federal Register Thursday.
Ronald Kruszewski, the CEO of Stifel Financial, said that he likes changes in the final version that should make advising retirement plan participants easier but worries about conflicts between the new Labor Department requirements and the U.S. Securities and Exchange Commission’s Regulation Best Interest.
Dan Houston, the CEO of Principal Financial Group, also welcomed changes related to plan administration but suggested that, if the new regulations stand, they will drive up costs.
The executives touched on the fiduciary definition during conference calls their companies held to go over first-quarter earnings.
What it means: Executives at investment firms and life insurers are starting to get past generalities about the new Labor Department regulations and find out what’s in there.
Ronald Kruszewski: Kruszewski runs Stifel Financial, a St. Louis-based asset manager with $458 billion in assets under management.
He talked about the new regulations Wednesday, a day after a preview version came out.
“My first blush reaction was that it appeared to dial back from the proposal that came out originally,” he said. “I was somewhat surprised that, at least on an initial review, the rule appears to be less restrictive than what was proposed.”
The final version does appear to target non-variable indexed annuities, and insurance groups are likely to challenge the rule in court, Kruszewski said.
But the final version and the implementation guidelines will help advisors continue to provide general education for retirement account rollovers, he said.
He suggested that any gaps between the new regulations and Reg BI could be a problem.
