In a surprise move that caught the financial services industry off guard, the fiduciary rule will go into effect on June 9 without further delay, Secretary of Labor Alexander Acosta says.
The Trump administration official ended weeks of speculation as to whether the Department of Labor would again delay implementation, disclosing the agency’s intentions in an opinion article in The Wall Street Journal.
The department had pushed back the initial implementation date by 60 days after President Trump issued an executive memo calling for a review of the regulation.
The review is ongoing, Acosta writes, but delaying the regulation a second time would not be consistent with the law, adding that the Labor Department had "found no principled legal basis to change the June 9 date while we seek public input." He says he he hopes the SEC will "be a full participant" in the review because of its regulatory expertise.
Although the Labor Department could still make revisions to regulation after completing its review, fiduciary supporters welcomed the news.
"Evidence shows lobbyists' attacks on the rule are unfounded. This was the right decision for investors and honest firms," Barbara Roper, director of investor protection at the Consumer Federation of America, tweeted at Acosta.
“We are confident that any data-driven, robust analysis that fairly considers the facts will prove again that Americans saving for retirement deserve to have their best interests put above their financial advisers’ economic interests,” adds Dennis Kelleher, president of advocacy group Better Markets.
Many Trump supporters and financial advisers were sure to be frustrated as news of the administration’s decision spread Tuesday morning.
The Financial Services Institute, a lobbying group that has vehemently opposed the Obama administration initiative, said it was "disappointed in this latest development."
"We will work with Secretary Acosta, Congress and through the legal system" to fight the fiduciary rule, "and will continue to bring our members critical tools to help them comply with this rule in the meantime."
Acosta, in his op-ed article, tried to head off such complaints.
"Some who call for immediate action on the Obama administration's regulations are frustrated with the slow process of public notice and comment. But this process is not red tape. It is what ensures that agency heads do not act on whims, but rather only after considering the views of all Americans," he wrote.
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