March 1, 2017 at 1:54 pm ET
Labor Department Proposes 60-Day Delay of Fiduciary Rule Implementation
The Labor Department on Wednesday filed a proposal that would delay by 60 days the implementation of an Obama-era rule aimed at preventing conflicts of interest in the retirement adviser industry.
The proposal, which will be published in the Federal Register on Thursday, calls for postponing the currently scheduled April 10 implementation date for the fiduciary rule. A 15-day comment period will commence tomorrow.
There will also be a 45-day comment period on President Donald Trump’s executive memo, which directs the Labor Department to examine the rule and analyze its economic impacts.
Earlier this week the Office of Management and Budget concluded its review of the delay request and designated the rule “economically significant.”
Proponents of the rule, such as consumer advocacy groups, say the delay will jeopardize retirement savers’ interests by allowing them to fall victim to high fees. But they face a tough fight with an industry eager to stall the rule, and a White House that wants to roll back regulations.
“This proposal to delay the fiduciary rule is clearly part of the administration’s plan to undo it altogether,” Lisa Donner, executive director of Americans for Financial Reform, said in a statement Wednesday.
Opponents of the Obama administration’s rule say it would limit consumers’ choices of products and services while hurting the ability of advisers to serve clients with small balances.
Advisers should abide by a “best-interest” standard for their clients, Financial Services Roundtable Chief Executive Tim Pawlenty said in a statement Wednesday, but “such a requirement should be implemented without miles of bureaucratic red tape.”