Why We Might Never Get A Fiduciary Rule
‘There is a good possibility, due to significant pushback, that the SEC’s version might never fully come to pass,’ says Fi360’s Blaine Aikin.
At the 2018 Fi360 Conference in San Diego, John Sullivan of 401k Specialist interviews Blaine Aiken, Executive Chairman of Fi360, to discuss the rapidly evolving fiduciary regulation landscape affecting financial advisors. Aiken emphasizes the remarkable timing of major regulatory events aligning with the conference two years in a row—first the Department of Labor (DOL) rule in 2017, and then the Securities and Exchange Commission (SEC) rule in 2018.
Aiken shares concern over the SEC’s controversial proposed rule, noting it lacks strong support among commissioners and includes problematic elements. He remarks that the DOL rule is effectively “on life support” due to legal challenges and uncertainty, despite the industry having made progress in adapting to it. He laments the missed opportunity for a stable regulatory foundation, suggesting that even if parts of the rule were dropped, it would have provided a basis for building future standards.
He points out that many firms have already embraced a fiduciary mindset, and there’s little reason to revert. The best strategy for firms is to occupy the “high ground” by maintaining fiduciary standards regardless of regulatory limbo.
Looking forward, Aiken suggests that the SEC rule might not be implemented until 2020—if at all—and predicts continued legal and legislative battles, including the possibility of new rules from the DOL or states.
Despite the regulatory uncertainty, Aiken notes a positive mood at the conference. Attendance is strong, and advisors appear confident, focused on professional development, maintaining reputations, and advancing the profession amid ongoing change.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of 401(k) Specialist and Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots. Experienced financial services content executive specializing in creative new media delivery. He joined the American Retirement Association in 2023 as Chief Content Officer, overseeing communications for the organization, as well as its sister organizations.
