The U.S. Department of Labor (DOL) postponed the applicability date for the fiduciary rule by 60 days until June 9, according to a notice posted in the Federal Register.
“Based on its review and evaluation of the public comments, the Department has concluded that some delay in full implementation of the Fiduciary Rule and PTEs is necessary to conduct a careful and thoughtful process pursuant to the Presidential Memorandum, and that any such review is likely to take more time to complete than a 60-day extension would afford, as many commenters suggested,” the DOL stated in the Federal Register.
As of March 17, the DOL had received approximately 193,000 comments and petition letters, expressing a wide range of views on whether the department should grant a delay and the duration of any delay.
The rule would expand the definition of fiduciary, impacting financial advisers providing retirement savings advice by requiring them to put their clients’ best interests first. Advisers would have to disclose their fees and commissions to clients to avoid conflicts of interest, which opponents argue would raise costs and make retirement planning more difficult for investors.
President Donald Trump directed the Labor Department to delay implementation of the rule for further review to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.
The Financial Services Roundtable supports the postponement of the rule.
“This overly complicated rule is harming access to affordable retirement advice and services, while limiting choices for hardworking Americans saving for the future,” FSR CEO Tim Pawlenty said. “Today’s announcement will allow time for DOL to begin its review of, and potentially revise or rescind, the rule in accordance with the President’s February Memorandum.”
FSR is concerned, however, that the study will require more than 60 days and without a longer extension retirement savers would be subject to unnecessary disruption and confusion.
FSR also believes the Securities and Exchange Commission is the appropriate regulator to adopt and implement a best-interest standard for all brokerage accounts (including IRAs) held by retail customers. It believes the DOL should rescind the rule.