DOL Finalizes Rule To Delay Fiduciary Rule Applicability Date To June 9

DOL Finalizes Rule To Delay Fiduciary Rule Applicability Date To June 9

DOL Finalizes Rule To Delay Fiduciary Rule Applicability Date To June 9

On April 7, the Department of Labor (DOL) finalized its proposed rule delaying the fiduciary rule’s applicability date from April 10, 2017 to June 9, 2017. The delay rule does delay everything until June 9th – and on June 9th, advisors providing investment advice for a fee to retirement plans, participants or to IRA holders will need to satisfy the Impartial Conducts Standard.  The standard requires that advice be in the best interest of the client (prudent and loyal), that there not be any misleading statements and that the compensation be reasonable.

All other requirements of the DOL fiduciary rule are not applicable until 1/1/2018 – and that date may also slip, depending upon the findings of the Department once their impact analysis is completed.  If the Department finds the rule has limited access to advice, increased costs of advice, created market disruption or increased litigation risk, the Department must revise or rescind the rule, according to the directive from the White House.

Prospects: DOL may need more time to complete the new analyses required by the presidential directive. On the other hand, the agency is under pressure to determine its next course of action (rescission of the rule, modification of the rule, or finalization of the rule as it was issued on April 8, 2016) as soon as possible.

NAIFA Staff Contact: Judi Carsrud, Director –Government Relations.