Obama-era rule on financial advisers to go forward, for now

With DOL Rule Date Ensured Class-action Lawsuits Take Spotlight

After a almost four month delay, the Trump administration has chose to allow the Department of Labor to move forward with a rule meant to stop investment advisors from pushing customers into products that primarily benefit the advisor.

The controversial regulation, which is known as the fiduciary rule, was pushed back after President Trump signed a memo in February asking the department to re-evaluate the rule and revise it if it would be harmful to investors. Acosta summarized the situation saying "We have carefully considered the record in this case ... and have found no principled legal basis to change the June 9 date while we seek public input".

Some Democratic Senators on Friday raised concerns over the possibility that the Trump administration will permanently shelve the fiduciary rule.

Although the Labor Department could still make revisions to regulation after completing its review, fiduciary supporters welcomed the news. "The RFI will specifically ask for public comment on whether it is likely to take more time to implement these new approaches than what the Department envisioned when it set January 1, 2018, as the applicability date for full compliance with all of the exemptions' conditions, and, if so, whether an additional delay in the January 1, 2018 applicability date would reduce burdens on financial services providers and benefit retirement investors by allowing for a smoother implementation of those market changes".

Consumer advocates greeted Acosta's announcement, which appeared as a departure from a string of moves in recent months by the administration and Republican lawmakers to ease regulations. "ADISA will work with our members to ensure that all involved understand their responsibilities under the revised rule and accompanying exemptions, and will continue to work with the Department, Congress and the SEC to ensure that all applicable rules and regulations create a level playing field for financial professionals and serve the best interests of retirement savers".


The DOL delayed portions of the Obama administration's regulatory package that aimed to reduce the allegedly conflicted investment advice given to retirement savers until June 9.

Wall Street firms may still find a win of sorts, despite that the rule's implementation date was not blocked. But if you receive any financial advice - including more indirectly, through your workplace retirement plan, for example - you could be protected by the rule. The department said it would use the time to collect applicable information, including public comments, on the potential consequences of the rule.

Neil Bradley, chief policy officer for the U.S. Chamber of Commerce, another fiduciary rule opponent, said the business trade group would "continue to pursue all available options" to stop the rule.

But Consumers Union urged the Labor Department to "resist industry-led efforts to diminish or weaken the rule and the important protections it provides".

"We urge full compliance and enforcement in order to protect against the harmful practices that threaten the retirement security of millions of workers and retirees", she said.

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