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DOL’s Fiduciary Rule is Still in Effect, Lawyer Warns

May 14, 2018

Despite the fact that the Department of Labor has said it will not pursue violations of its fiduciary rule following an appeals court decision vacating the rule, the best-interest retirement advice regulation is still in effect, a lawyer tells ThinkAdvisor.

In March, the U.S. Court of Appeals for the Fifth Circuit vacated the DOL’s fiduciary rule, which purports to force retirement account advisors to put clients’ interests first and had gone into partial effect last summer, and the court was expected to issue a mandate repealing the rule Monday, May 7. That day, the DOL issued a Field Assistance Bulletin to its regional directors saying it would not pursue violations of the sections of the rule already in effect.

Nonetheless, until the Fifth Circuit issues its mandate to vacate the rule, it’s very much still in effect, David Kaleda, principal at Groom Law Group, said at the Practising Law Institute’s Fiduciary Investment Advice event Thursday, according to ThinkAdvisor. Groom made inquiries to the court but received no explanation for why the mandate hasn’t been issued yet, Kaleda said, adding there’s no reason to believe the court would not do it eventually, the publication writes. In the meantime, however, advice practices should proceed as if the rule hasn’t been vacated, according to Kaleda, ThinkAdvisor writes.


“Conceptually, you should be doing what you have been doing” to comply with the DOL’s rule, Kaleda said, according to the publication. “Why hasn’t the [5th Circuit] mandate been issued? Fair question.”

By Alex Padalka
  • To read the ThinkAdvisor article cited in this story, click here.