DOL Fiduciary Rule Update
Firms have spent more than a year and millions of dollars preparing for the DOL Fiduciary rule, set to commence on April 10. This rule requires retirement plan service providers, such as brokers, advisors and recordkeepers to act in the best interests of clients when working with retirement accounts.
However, on February 3, the White House directed the DOL to evaluate the Fiduciary Rule and the related prohibited transaction exemptions to determine whether the guidance will harm investors, disrupt the industry, or cause an increase in litigation and the price of advice. After its analysis, the DOL can implement the rules as drafted, modify them or rescind them.
The DOL filed notices on February 9 to delay implementation of rule for 180 days and seek public comments. It is likely the OMB will accept the DOL notice, and service providers will not need to comply with the Fiduciary Rule by April 10. Instead, they will be held to the existing fiduciary standards and prohibited transaction exemptions for the time being. When or if the fiduciary rule is implemented—and in what form—is uncertain