Update on the DOL Fiduciary Rule

Jan 26, 2017

Since the inauguration of President Trump, speculation in regards to a possible delay of the implementation of the Department of Labor’s fiduciary rule has run rampant. Presently, the rule is scheduled to begin implementation on April 10, but ADISA’s sources in Washington, DC, believe some action that will lead to at least a delay is imminent.  

Key takeaways from this week’s news and industry announcements:

  • The Trump administration has communicated to the heads of executive departments and agencies that a regulatory freeze is in place, pending review. Some believe that this memo could impact implementation of the fiduciary rule, but technically the directive applies only to federal rules that have been sent to the Federal Register but not published and those that have been published but not yet taken effect. Although the DOL fiduciary rule has not yet been implemented, it is a final and effective rule (in other words, the rule has been dropped irretrievably in the mailbox, just not yet delivered—April 10, 2017, is the delivery date).
  • The Trump administration is expected to take action to delay implementation of the fiduciary rule, most likely in one of these ways: the DOL will propose to delay the rule, which would require a public notice and comment period; or the White House may issue an “interim final rule,” which would delay the fiduciary rule and potentially other regulations (this does not require public comment, and opponents may also seek an injunction to the interim final rule). If done, however, this would probably result in a stay while litigation is pending. 
  • Any action that results in the delay of implementation is expected to be the first step in ultimately changing the rule as presently constituted and replacing it with something new.
  • Our view has long been that a uniform fiduciary standard promulgated and administered by the Securities & Exchange Commission that provides investor protections and maintains affordable access to professional investment advice is the best and proper course for the industry and the investor. 

ADISA will continue to closely monitor the news and any announcements from the Trump administration that may affect our members. 

We will also aggressively advocate on behalf of our members and the industry should a new period of public comment, a substitute rulemaking exercise, or legislative activity addressing a fiduciary standard take place.