UPDATED 11:15 A.M. FEB. 6
President Trump has tackled the Labor Department’s fiduciary rule, just weeks ahead of the April 10 implementation date.
On Friday, Feb. 3, the President signed an administrative memorandum to the Secretary of Labor that directs the department to take necessary actions to review the rule and decide if it should be rescinded or revised.Cautioning that the rule “may significantly alter the manner in which Americans can receive financial advice, and may not be consistent with the policies of my Administration,” the memorandum calls for an updated economic and legal analysis concerning the likely impact of the rule to examine:
- whether the rule has harmed or or is likely to harm investors due to a reduction in access to retirement accounts or advice;
- whether it has resulted in dislocations or disruptions within the retirement services industry that may adversely affect investors or retirees (a point has been made consistently in litigation challenging the rule); and
- whether it is likely to cause an increase in litigation and an increase in the cost of "retirement services."
Subsequently, the Department of Labor issued a succinct statement: “The Department of Labor will now consider its legal options to delay the applicability of the date as we comply with the President’s memorandum.” This tells us two things:
- pending further action, the applicability date remains April 10, 2017; and
- any official delay will need to come by way of the Department of Labor.
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