Well, the 60-day delay in implementing the Department of Labor’s new Fiduciary Rule came to an end with a big fat goose egg in the results column. This new rule – which requires all financial advisors providing services to retirement plans to put their clients’ interests of ahead of their own – has been a topic of debate and was recently delayed in order to make potential amendments. All the anticipation as to what actions the new administration might take during this time extension was for naught. The new Secretary of Labor let the Fiduciary Rule take effect on June 9 without any changes to the final version as was originally anticipated.
But does that mean retirement plan providers, advisors and clients can settle in and wholeheartedly embrace the new regulations? Not quite yet. While it would certainly be prudent for everyone to comply with the new rules in the short term, especially with regard to advisors and providers clarifying their fiduciary responsibility, there are still rumblings out there that the new laws could be scrapped by the administration sometime in the future. In fact, since I started writing this post a few weeks ago there have been two proposals from panels in the House to kill and replace the new regulation and prevent funding for its enforcement. That is leaving a lot of uncertainty for advisors and providers as to the level of service and products they can offer – and for clients, the level of service they can expect from their advisors and providers.
As I have mentioned in past articles, here and here, there is a need for advisors to offer a fiduciary standard of service and clients should be wary of any anyone who refuses to apply that standard. But the government should not make achieving that standard so bureaucratic that it becomes difficult for advisors to comply. There are already regulations affecting the securities industry without added layers of disclosures and notices.
Congress and the administration must make every effort to overcome their differences and find a decisive way forward. It does no one any good to spend all this time preparing for a new world only to have the rug pulled out from underneath them.
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