Two-Thirds Expect Delay, Revisions to DOL Fiduciary Rule

With the presidential inauguration weeks away, there is little clarity about what the incoming administration will do in regards to the Department of Labor Fiduciary regulation.

President-elect Donald Trump’s pick to head the DOL, Andrew Puzder, so far has not yet commented on the rule, which would require financial advisers to retirement accounts to act in their clients’ best interests.

Ascendant recently polled a group of compliance professionals who attended our most recent ComplianceCast, “Highlights of 2016, A Look Forward to 2017,” with interesting results.

Of the group, nearly two-thirds (64%) believed that the rule would be delayed with a plan to revise. Meanwhile, 19% believe it will be implemented as scheduled on April 10, 2017, and 17% believe it will be withdrawn.

Because of the lengthy process involved in removing a regulation off the books, it may require some hard work if the Trump administration wants to kill it.

Still, there are some that believe that the withdrawal of the regulation could be ultimately beneficial for the registered investment adviser model.

Fred Reish of Drinker, Biddle & Reath makes that case here:

Over the years, more and more 401(k) plans have shifted to advisors who work in the RIA model because of its transparency, the focus on advice, and the avoidance of conflicts of interest. Part of that change was attributable to RIAs marketing themselves as fiduciary advisors. It’s possible that, going forward, RIAs will market their IRA services as fiduciaries, pointing out that non-fiduciary advisors have a lower standard of care (the suitability standard) and have conflicts in how they are compensated for selling certain products over others.

Further clarity should be materialize in the coming weeks, but it seems clear that while change is possible and delay is likely, the weeks and months to come will bring plenty to keep an eye on.

ComplianceCasts are broadcast monthly, focusing on key areas of interest for compliance, operational, and management personnel. Recent editions include Portfolio Management and TradingDue Diligence of Third-Party Service Providers, and Planning for the Annual Review and Reporting. The full archive can be accessed by clicking here.


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CSS frequently publishes blog posts which are written by our team from their observations in the field, at conferences and through experiences with compliance professionals. These posts are designed to further knowledge and share industry best practices. Topics run the gamut, including Form ADV, cybersecurity, MiFID II, position limit monitoring, technology challenges and more. Complete and submit the brief form below to receive notifications when we publish new content.

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