DOL Fiduciary Rule Officially Dead
June 20, 2018 by Barron's
The DOL fiduciary rule just flatlined.
The department failed to ask the Supreme Court to hear an appeal of a March appellate court ruling that voided the rule, WealthManagement.com notes. The end of the day Wednesday marked the deadline for such a petition.
The DOL’s silence effectively ends the short-lived rule, which was crafted by the Obama administration and went into partial effect on June 9, 2017.
The rule required all professionals offering advice on retirement accounts to place clients’ interests ahead of their own. Consumer advocates applauded the rule, saying it would prevent brokers from offering high-commission products that cost clients money. Critics countered that it was overly burdensome, added to compliance costs and made it uneconomical for firms to keep open some brokerage accounts.
The DOL’s failure to defend its own rule comes as no surprise. Under President Trump, the department had delayed its implementation and was reviewing it for possible revision or cancellation.
Now the financial industry is focused on a proposed best-interest rule from the SEC that is seen as being less restrictive than the DOL rule. The SEC is taking public comments on its proposal until Aug. 7.
