How will the election results affect the DOL’s new fiduciary rule?
Posted on 11/15/2016
For more information on the DOL Rule, read our previous blog post HERE
The election of Donald Trump has left financial services firms wondering just what, if any, impact this will have on the DOL’s new fiduciary rules. Will the DOL fiduciary rules be delayed or rescinded altogether? How can a firm plan for 2017 and beyond with so much uncertainty?
No one, including NRS, knows the answers to these questions. However, we can suggest a prudent course to follow while waiting for the new Administration to announce and try to implement its policies.
It is unclear whether delaying or undoing the DOL fiduciary rules is a priority for the new President and, if it is, where on the list of his priorities this falls. Assuming this is a priority, here are some of the options open to the new Administration:
- Issue an interim final rule delaying the applicability date (April 10, 2017) and compliance date (January 1, 2018), and then going through the rulemaking process. While this could be a possibility, it faces serious obstacles. There are only 80 days between the inauguration on January 20 and the April 10 applicability date, which may simply not be enough time for such a course of action.
- Eliminate the new fiduciary rules entirely before April 10. This is not permitted under the Administrative Procedure Act (APA) without going through a months-long notice and comment process, unless the Administration can show “good cause.” Attorneys NRS has spoken with view this as unlikely.
While we do not know what course the new Administration will follow, the worst-case scenario is clear: the rules are not delayed and your firm is not in compliance on April 10. NRS strongly recommends continuing the planning and implementation process in the months ahead.