Delay implementation of fiduciary rule
- Author: Joey Payne Mar 04, 2017,
Mar 04, 2017, 0:25
The U.S. Dept. of Labor is seeking to delay the implementation of a rule that is meant to protect the best interests of retirement savers but has drawn the ire of many in the financial-services sector. While the determination ostensibly makes it more burdensome for the Trump administration to unravel the initial fiduciary rulemaking, there is some disagreement as to what this will actually mean in practice.
It also calls for a 45-day comment period on President Trump's order to the department to examine whether the fiduciary duty rule could adversely affect American's access to retirement information and financial advice, and whether it should be revised or revoked.
In a move bound to cheer opponents of the Department of Labor's ( DOL ) controversial, pending fiduciary rule, the DOL on Wednesday proposed delaying the "applicability" - that is, implementation - of the new rule for 60 days.
Without a delay, the fiduciary rule would take full effect April 10. As a result, the new rule would require brokers and advisors to put their clients' best interests before their own profit.
"More delays are likely", said Mr. Saxena, given that the Labor Department doesn't yet have a secretary installed. The first Department of Labor frequently asked questions issued last October created even more questions and didn't address substantially more. Advocates say the rule can help retirement savers by making it more hard for brokers to recommend investments that are expensive or complicated. A 15-day comment period will commence tomorrow.
"We are already seeing the negative consequences of the rule on the marketplace with some firms announcing that they will no long offer certain products, others no longer offering any IRA brokerage accounts, firms reducing web-based financial education tools, and others announcing that advice to clients with lower balanced accounts will be discontinued", Bentsen added.