The hotly debated investor protection rule that would require financial advisors to work in your best interest when handling your retirement money has been pushed back.
The "fiduciary rule" as it's also known, was to take effect on April 10. It's now delayed until June 9, according to the Department of Labor.
Labor's move to slow down implementation comes after President Donald Trump issued a presidential memorandum in February, directing the department to review it and prepare an updated economic and legal analysis.
Legal experts said the Labor Department's announcement still keeps intact the core of the regulation. Among those are requirements that advisors charge no more than reasonable compensation, avoid misleading statements and act in your best interest when recommending investments.
"The DOL is effectively regulating IRAs," said Marcia Wagner, managing director at The Wagner Law Group in Boston. "This is the DOL saying that this isn't up for debate."
Indeed, some $7 trillion in IRA assets are at the center of the debate, as they are moneymakers for financial services firms and would fall under the rule's domain.
Consumer advocates said while it's encouraging that certain provisions of the rule will remain, the delay isn't helpful for investors.
"We still need the full protection of the rule to become applicable — a meaningful and legally enforceable best interest standard," said Micah Hauptman, financial services counsel at the Consumer Federation of America.
"Enforceability wouldn't have kicked in until January 2018 for IRA investors, but that's what the rule calls for," he said. "It's critical that the entire rule become applicable as soon as possible — on time, as it was finalized."
Other portions of the regulation concerning specific written disclosures advisors and financial services firms must make to clients won't take effect until Jan. 1, 2018, according to the DOL's post on the Federal Register.
Organizations representing the financial services industry cheered the rule's delay — and some pushed for even more time.
"ICI welcomes the Department of Labor's delay of the original implementation date of the agency's fiduciary rule until June 9," said Paul Schott Stevens, president of the Investment Company Institute, which represents the mutual fund industry, in a written statement. "But additional time is critically needed."
"Until June 9, you're on your own," Wagner said. "If I haven't heard from my financial advisor, I might reach out and ask, 'What's going on? What standard of care are you under?'"
Start by digging up the details of your financial advisor's background: Look him or her up on BrokerCheck, a site maintained by the Financial Industry Regulatory Authority, and the advisor page of the Securities and Exchange Commission.
Ask the following questions: