Published: Sat, March 04, 2017
Science | By Kerry Wheeler

Proposed Two-Month Delay for Fiduciary Rule

Proposed Two-Month Delay for Fiduciary Rule

The DOL is seeking a 60-day delay of the rule, to June 9.

The Labor Department is proposing to extend the applicability date of the fiduciary regulation by a mere 60 days - while taking (just) the next 15 days to collect comments on that proposal.

A delay may be forthcoming, but it's not a done deal yet. Of course this is presumed based on Trump's anti-regulatory agenda, but the actual process of gutting the fiduciary rule has proved massively complex already. The first Department of Labor frequently asked questions issued last October created even more questions and didn't address substantially more.

"The nature and magnitude of any such delay of the effects is highly uncertain, as some variation can be expected in the pace at which firms move to comply and mitigate advisory conflicts and at which advisers respond to such mitigation and adjust their recommendations to satisfy impartial conduct standards", the Labor Department says in its proposal. But he also noted that the 60-day delay is "economically significant" because of the risk of depriving retirement investors of the benefits of having fiduciary standards applied to their advisors.

The delay and possible demise of the fiduciary rule comes after the regulation survived several court challenges, including a lawsuit brought by some industry trade groups.

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Consumer groups who support the rule are anxious a delay could open the door for opponents to find ways to weaken or eliminate the rule.

Republicans said the rule would make it more hard for those with middle incomes to get retirement advice. The announcement follows a presidential memorandum issued on February 3, 2017, which directed the department to examine the fiduciary rule to determine whether it "may adversely affect the ability of Americans to gain access to retirement information and financial advice".

Opponents of the rule argue it can have the unintended outcome of making it harder for some firms to work with savers who have small account balances, which are less profitable.

Kenneth Bentsen, SIFMA president and CEO, said, "The delay will allow the new administration an opportunity to review the rule's impact on investors and the market, while providing firms additional time to prepare for potential changes to the rule".

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