Trone: The DOL Rule is History, It’s Time For Plan Sponsors To Demonstrate Leadership

Posted by: Fred Barstein in Compliance, Featured Video, Fiduciary May 12, 2016

In an interview with Don Trone of 3Ethos, 401kTV wanted to explore the underpinnings of the DOL Fiduciary Rule and what impact the rule would have on Sponsors. Mr. Trone is one of the foremost authorities on fiduciary standards and has trained almost 20,000 financial professionals in the area of fiduciary conduct. Trone is regarded in the industry as the “Father of Fiduciary.”

We asked Mr. Trone to give us his opinion about the DOL rule and its impact on Plan Sponsors. Trone’s answer was not what we expected. He says that the DOL rule did not necessarily imply that sponsors had to make any significant changes in behavior.

Mr. Trone was unequivocal about his disdain for the DOL rule and says, “I don’t think anything the DOL has done is going to improve participant outcomes or retirement savings whatsoever. In fact I think it’s going to be a detriment.” He says the rule is not truly a fiduciary standard as much as it is a “complex & punitive set of rules, designed to punish Wall Street.” He thinks that the DOL rule will hurt participants and will not improve outcomes.

Trone says the DOL Rule “is all water under the bridge, it has happened and that has passed.” Taking a more philosophical approach, he did point out the statistic that 70% of employees and plan participants did not like their job or trust their employer. Trone repeatedly stressed that Sponsor behavior is perhaps the most important element affecting participant outcomes. Those outcomes, according to Trone can be traced back to the relationship between Sponsor and Participants.

“If plan sponsors would focus on the core principles of leadership and stewardship and integrate those core principles into the 401k investment committee that would go a long way in improving participant outcomes.”

In the final analysis, Trone firmly believes that Sponsors should not be distracted by the new DOL Fiduciary rule and instead concentrate on stewardship and leadership to produce better outcomes for participants.

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Fred Barstein

Founder & Editor-in-Chief at 401kTV | TRAU | TPSU

Fred Barstein is the Founder & Editor-in-Chief of 401kTV. Fred is also the Founder and CEO of The Retirement Advisor University (TRAU), a collaboration with UCLA Anderson School of Management Executive Education and The Plan Sponsor University (TPSU).Mr. Barstein was also Founder and Editor-in-Chief of NAPA Net.