President Donald Trump is calling for a review into advice conflict of interest rules as part of plans to undo measures to prevent risk-taking in financial services.
The Guardian reports the Department of Labor has been ordered to review the “fiduciary rule”, which is designed to protect US clients’ retirement money from conflicted advice.
The rule is due to come into effect on 10 April.
White House press secretary Sean Spicer says: “The rule’s intent may be to have provided retirees and others with better financial advice, but in reality its effect has been to limit the financial services that are available to them.
“This is exactly the kind of government regulatory overreach the president was put in office to stop.”
But CFA Institute director of capital markets policy Linda Rittenhouse says: “There will be a shift backwards in terms of responsibility. It restores a lower standard. We will go back to the suitability rule that does not require advisers to put the client’s interests first.”