One More Step and DOL Rule Delay is Official
The Department of Labor has officially filed for an 18-month delay of the final implementation of its fiduciary rule, ThinkAdvisor writes.
Just as when it requested approval for the delay from the Office of Management & Budget back in August, the DOL is pushing pack the original Jan. 1, 2018 implementation date to July 1, 2019, according to the publication.
The OMB must still approve the delay of the rule, which purports to force retirement account advisors to put clients’ interest first and went into partial effect in June, ThinkAdvisor writes.
The delay also applies to the applicability of the rule’s best interest contract exemption, Fred Reish, partner in Drinker Biddle & Reath’s employee benefits and executive compensation practice group, tells the publication. That exemption lets advisors sell some commission-based products after signing a best-interest contract with their clients. Reish also tells ThinkAdvisor the text of the extension will only become available after OMB approves it, but that it may contain “additional conditions.”
The National Association of Insurance and Financial Advisors and the Financial Services Institute applauded the delay, according to the publication. But Barbara Roper, director of investor protection for the Consumer Federation of America, tells ThinkAdvisor the filing isn’t an actual delay.
“A delay implies the provisions will eventually take effect,” she tells the publication. “Unfortunately, the DOL has made crystal clear that they have no intention of ever implementing key provisions that are essential to the rule’s effectiveness and that make its requirements enforceable.”
The rule faces opposition from GOP lawmakers, and a House panel has recently voted to hand over regulatory authority for broker standards to the SEC and repeal the DOL’s rule. SEC chairman Jay Clayton said recently that the commission doesn’t plan to supplant the DOL’s rule in drafting its own version of a fiduciary rule, which would apply to all financial advisors.