Trump Administration Memo Leaves DOL Fiduciary Rule Open, Delay Likely

On Friday, February 3, the Trump Administration issued a memorandum which is likely to delay implementation of the DOL Fiduciary Rule. Trump’s memo to the Department of Labor (DOL) does not contain an explicit directive delaying the Fiduciary Rule. The memo does, however, require the DOL to prepare an updated legal and economic analysis concerning the impact of the Fiduciary Rule. The analysis must consider whether the Rule is likely to harm investors due to a reduction in access to certain retirement savings offerings or financial advice, cause dislocations within the retirement services industry that may adversely affect investors or retirees, or increase litigation and increase the prices that investors must pay to gain access to retirement services.

Based on the DOL’s review, if the answer is yes to any of those considerations, or if the DOL concludes that the Fiduciary Rule is inconsistent with the Trump’s Administrations’ policy, the DOL should publish for public comment a proposed rule rescinding or revising the Fiduciary Rule. A copy of President Trump’s memo can be found here: https://www.whitehouse.gov/the-press-office/2017/02/03/presidential-memorandum-fiduciary-duty-rule. Although the initial April 10th implementation date for the Fiduciary Rule remains in place, a delay is likely, but not yet certain. The Acting DOL Secretary Ed Hugler said in a statement, “The Department of Labor will now consider its legal options to delay the applicability date as we comply with the president's memorandum.”

NCS Regulatory Compliance will continue to monitor the status of the DOL Fiduciary Rule and, as always, will keep you informed of any impact to your business. If you have any questions regarding the applicability of the Fiduciary Rule or other regulations, please contact your NCS Regulatory Compliance Consultant.