Is the Fiduciary Rule Dead?

On March 15, 2018, the U.S. Court of Appeals for the Fifth Circuit struck down the controversial “Fiduciary Rule” in a decision by Judge Edith Jones that was none too subtle concerning its intended effect. The court noted that the Administrative Procedure Act requires a court to “hold unlawful and set aside agency action” that it determines is “arbitrary, capricious, … not in accordance with law” or not in accordance with statutory limitations. The opinion concluded with the words “we reverse the judgment of the district court and vacate the Fiduciary Rule in toto.” The Fiduciary Rule was first proposed by the U.S. Department of Labor in 2010, and quickly met fierce resistance from the retirement industry. The Rule purported to jettison the Department’s decades-old definition of “investment advice fiduciary,” and to erect in its place a new and substantially expanded test that would subject a much…

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