SEC Commissioner Michael S. Piwowar criticized the Fiduciary Rule (the "Rule") in a comment letter submitted to the Department of Labor. Commissioner Piwowar stated that the prohibitory scheme established by the Rule generally is inconsistent with "American traditions of self-reliance, pioneering spirit, and rugged individualism."

Commissioner Piwowar raised three major concerns with the Rule.

First, Commissioner Piwowar argued that the DOL maintains an "excessively dour" view of the effectiveness of conflicts disclosures, and that the view is inconsistent with the SEC's experience concerning the regulation of conflicts of interest. Commissioner Piwowar indicated that the SEC currently is engaged in a "state-of-the-art" study of rulemaking processes that "prominently" includes disclosure-oriented policies. Accordingly, Commissioner Piwowar urged the DOL to cooperate with SEC staff in exploring potential disclosure-based remedies.

Second, Commissioner Piwowar contended that the Rule does not distinguish adequately between "selling" and "advice" activities. This lack of distinction, Commissioner Piwowar wrote, is inconsistent with the discrete regulatory frameworks that govern investment advisers and broker-dealers. For example, an investment adviser is a fiduciary and for that reason owes a duty of loyalty and a duty of care to clients. By contrast, a broker-dealer typically is not considered a fiduciary, but is required to deal fairly with clients by SEC and self-regulatory organization (e.g., FINRA) rules. Commissioner Piwowar contended that distinctive regulatory frameworks for investment advisers and broker-dealers are an important aspect of the regulatory regime, and indicated that broker-dealers are subject to a suitable amount of scrutiny pursuant to SEC and FINRA rules. According to Commissioner Piwowar, the assertion that "a broker-dealer's duties have less 'bite' than an investment adviser's obligations" overlooks the scrutiny to which broker-dealers are subject.

Finally, Commissioner Piwowar expressed concern that the Rule could impact both retirement portfolios and non-retirement securities accounts. Commissioner Piwowar stated that even though the Rule ostensibly was developed to target the ERISA plan and IRA account markets, compliance burdens might cause broker-dealers to apply the same standard to non-retirement accounts. In turn, he warned, the Rule "will have a dramatic impact on the provision of financial services to retail clients throughout the financial services industry."