After court appeals, a 60-day delay, an executive order, and an official investigation, the Fiduciary Rule will be implemented in under three weeks. The rule mandates that all advisers working with retirement plans or providing retirement financial advice act as fiduciaries for their clients. While brokers and insurance agents will be affected the most, this legislation will have implications across the industry.
While the Department of Labor will continue to investigate the rule with the SEC, Secretary of Labor Acosta announced in a Wall Street Journal opinion piece that the rule would not be delayed further. In his message, Acosta noted the review "found no principled legal basis to change the June 9 date while we seek public input."
Acknowledging the anxiety that comes with all major regulatory changes, Acosta added, “The department has repeatedly said that its general approach to implementation will be marked by an emphasis on assisting (rather than citing violations and imposing penalties on) plans, plan fiduciaries, financial institutions, and others who are working diligently and in good faith to understand and come into compliance with the fiduciary duty rule and exemptions." The rule will be phased in, likely with a "good faith" compliance period similar to other industry changes.
At this time, brokers must prepare to comply with the rule by June 9. Lobbyists have exhausted options to fight the legislation at this time, and the DOL has left no room for interpretation with their statements. The rule may change in the future after the public comment period. We'll be keeping our subscribers ahead of the curve with legislative updates as they come.