Ariel Sharon was one the most polarizing and most loved political and military figures in Israeli history. One of his confidantes, the Israeli journalist Uri Dan summed it up best. Dan said that the Israelis that did not want Sharon as Defense Minister would get him as Foreign Minister. Those that did not want him as Foreign Minister will get him as Prime Minister. So while some were ecstatic over Sharon’s resignation as Defense Minister after the slaughter of Palestinian refugees by Christian Phalangists in Lebanon with Israeli soldiers nearby probably weren’t so happy when Sharon staged one of the greatest political comebacks by being elected Prime Minister in 2001.
So when financial professionals such as brokers and insurers cheer the Department of Labor’s withdrawal of the change in the retirement plan fiduciary definition regulation will probably get a tougher definition in 2012 when it will be re-proposed and will probably extend the rule to individual retirement accounts. As Commander Uhura said in Star Trek III: The Search Spock: “be careful what you wish for, soon you may get it.”
Remember when Congress couldn’t strike a deal on fee disclosure for retirement plans and many in the industry cheered? What happened? A DOL regulation was implemented that ended up doing the same thing.
There are too many conflicts in the retirement plan industry, so a change in the definition of fiduciary that will create a level playing field of responsibility for everyone calling themselves a retirement plan financial advisor is a good thing. I am convinced that a change will occur; it’s only a matter of when.