Tens of millions of retirement savers will soon face noticeable changes to investment services available to them under the Department of Labor's fiduciary rule, which becomes effective in a little more than a month.
The rule basically requires financial advisors to put their clients' best interests ahead of their own profits. The rule is set to become effective on April 10, but the department has proposed a delay in the rule's implementation for a two month comment period.
Financial services firms that serve these clients have been working diligently to comply with this highly complex rule by its original deadline, notwithstanding the industry's well documented concerns about its negative consequences for investors.
The Trump Administration has asked the Department of Labor to conduct a new study of the rule to better understand how it might impact investors' choice and opportunities, increase costs and increase unnecessary litigation risk.
In response to the President's request, the Department has stated that the rule could undergo major changes and further has proposed a delay of the rule's applicability date. They should approve the delay immediately.
We are at a critical juncture. In order to be compliant with the rule, financial services firms must provide notice to their clients in millions of households, of the various changes that will be made to their services agreements and accounts as required by the rule. This notice will be sent before changes are made.