What is going on with the DOL’s Fiduciary Rule?

What is going on with the DOL’s Fiduciary Rule?

15 October 2017

As it stands today, the DOL’s Fiduciary Rule has been delayed to July 1, 2019. This delay to the ruling is a direct result of President Donald Trump’s executive order requesting the Department of Labor to conduct a review of the rule.

Even though the rule is delayed, the DOL has stated that advisers must comply with the Impartial Conduct Standards during this transitional period, which includes three components:

  1. Give advice that is in the “best interest” of the retirement investor. This best interest standard has two chief components: prudence and loyalty:
    • Under the prudence standard, the advice must meet a professional standard of care as specified in the text of the exemption.
    • Under the loyalty standard, the advice must be based on the interests of the customer, rather than the competing financial interest of the adviser or firm.
  2. Charge no more than reasonable compensation.
  3. Make no misleading statements about investment transactions, compensation, and conflicts of interest.

For investment advisers registered with the SEC, who are already obligated by fiduciary standards, these should come as no surprise or change to their existing procedures.

The DOL has said that they will not recommend enforcement on the aforementioned requirements during the transitional period.

What happens next is up in the air.

Filed under: Proposed Rules & Regulations

Tagged with: