The U.S. Department of Labor proposed Wednesday to delay the implementation deadline of its rule regarding fiduciary duty in retirement savings advice by 60 days.
The first phase of the DOL fiduciary rule implementation date is currently set for April 10, 2017. In response to a directive from President Donald Trump, the DOL has formally proposed to extend the fiduciary rule’s start date to June 9, 2017.
You can read the full text of the DOL’s new proposal here.
The proposed delay is a new rule itself, and will be open to a 15-day public comment period, according to Jamie Hopkins, Associate Professor of Taxation at The American College of Financial Services.
“This action is in direct response to a February 3, 2017 memorandum by President Trump, directing the DOL ‘to examine the Fiduciary Duty Rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.’” Hopkins wrote in Forbes.
“Furthermore, the memo directs the DOL to ‘prepare an undated economic and legal analysis concerning the likely impact of the Fiduciary Duty Rule,’” Hopkins said. “Ultimately, President Trump’s memo also directs the DOL to move forward with ‘rescinding or revising the Rule’ after undergoing the proper reviews and rule making procedures.”
The DOL’s fiduciary rule requires agents and advisors to abide by the fiduciary standard in addition to the suitability standard when selling annuities with retirement funds. As a fiduciary, one is required to act in the best interests of his or her clients.
The financial services profession has mixed feelings on the rule, which has been in the works for approximately seven years. Some advisors are in favor of the ruling and the benefits of having a “more uniform fiduciary standard across the board,” Hopkins said, while others in the profession contend that expanded fiduciary standards will increase the costs of receiving retirement advice for consumers.
In a news release, the DOL said it was acting in response to the Trump administration’s memorandum and issues raised regarding the fiduciary rule.
“The proposed extension is intended to give the department time to collect and consider information related to the issues raised in the memorandum before the rule and exemptions become applicable,” the DOL wrote in its release. “The department will accept public comments on the proposed extension for 15 days following its publication. Comments on issues raised in the presidential memorandum will be accepted for 45 days.”
The faculty of The American College of Financial Services will continue to monitor the latest developments on the DOL fiduciary rule, and will make appropriate updates to its educational DOL rule content as needed.
While the future of the DOL rule is uncertain, the need for highly trained retirement income advisors is never going away, especially now that the word “fiduciary” has woven its way into the public lexicon. The Retirement Income Certified Professional® (RICP®) designation from The American College of Financial Services equips advisors with the skills and expertise to serve as an effective retirement income planners in today’s dynamic environment.
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