As you likely know by now, the early reports from last Friday that the Trump administration was ordering a six-month delay to the implementation of the Fiduciary Rule were not correct. These reports were apparently based on a draft memorandum that included instruction to the DOL to postpone the applicability date of all provisions that were not yet effective. As it turned out, the final memorandum did not include such reference and does not actually delay the regulation.
The final Presidential Memorandum instructs the DOL prepare an updated economic and legal analysis concerning the likely impact of the Fiduciary Duty Rule, considering, among other things, whether the Fiduciary Duty Rule:
Harms access to certain retirement products, offerings, information or advice.
Results in “dislocations or disruptions” in the retirement services industry that adversely affect retirees or investors.
Will likely result in increased litigation in the industry.
The memorandum goes on to direct the DOL that if finds that the Fiduciary Rule does any of the above, it should propose to rescind or revise the rule.
There are many good articles out there already that provide more detail on the current status and potential fate of the Rule under the new Administration. In my opinion, the best of these is an article written by Michael Kitces over the weekend. Mr. Kitces’ article does a great job in laying out what happened last week and what we should be watching for next. If you have not read it, I would highly recommend that you do.
The bottom line is this:
Other than finally getting confirmation of President Trump’s position on the Fiduciary Rule, nothing else has changed. Full compliance with the Fiduciary Rule and the related exemptions that are scheduled to be effective on April 10th is still required.
To be sure, the potential for an imminent delay followed by either a full rescind or a revision is much more likely now. The rub is that with less than two months left before firms must comply with the current Rule, we still don’t know if, how or when it will occur.
In other relevant news, the nomination hearings for President Trump’s choice for Labor Secretary, fast food executive Andrew Puzder, have been pushed back to give him more time to turn in his paperwork and because of delays for other nominees. Delayed four times already, Mr. Puzder’s hearing will not be set until the Senate receives key paperwork laying out his financial disclosures and detailing his plan for avoiding future conflicts of interest.
On a final note, Dallas federal Judge Barbara M.G. Lynn announced last week that she intends to rule by no later than this Friday (Feb 10th) on the U.S. Chamber of Commerce-led lawsuit against the Department of Labor Fiduciary Rule.
Stay tuned… it should be an interesting week.
Contact us to find out more.
Call Steve Saltzman at 704-243-4512 or email steve.saltzman@ saltzmanassociates .com