Labor Secretary Alexander Acosta announced Wednesday that the Office of Management and Budget put out a request for information on the fiduciary rule.
The OMB’s action is widely seen as “the first step in deciding the fate of the rule,” which goes into partial effect this Friday, The Wall Street Journal reported.
Acosta made the comments at a congressional hearing on President Trump’s budget proposal.
“That is the first step,” Acosta told members. “We need that information and data in order to decide how to proceed.”
“We looked very carefully at whether we could postpone it,” Acosta admitted “When a rule is adopted, the executive branch cannot just postpone implementation of that rule: You need a new rule to change the old rule.”
“No one in government should be able to snap their fingers and undo laws,” he added. “That’s not how democracy works.”
In late May, Acosta wrote that there is no legal basis for delaying the fiduciary rule’s implementation date of June 9. However, on the same day the Department of Labor said it will not actually enforce the fiduciary rule until January 1, 2018, as long as fiduciaries “are acting in good faith.”
The latter announcement was billed as “relief” and came in the form of a Field Assistance Bulletin, detailing a grace period of sorts to allow for additional comments and for firms to continue to adjust.
“…during the phased implementation period ending on January 1, 2018, the Department will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions,” according to the bulletin.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of 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.
The good part about this rule is it may force representatives who sell products only on the basis of commission needs analysis to be held liable for those actions. The bad part of the rule is the costs of doing business with an adviser just increased for the clients. Many of those who will be effected are the ones who can least afford to have an increase in cost or ones that will not be able to have a representative since most advisers will avoid them.
since the Gov is always trying to protect the masses, they just hurt the vast majority of their base. Oh well – new day- new stupid rules from our Gov. Oh and by the way, get your legal degree since they will be the winners. Wow how did that work out, oh ya most all politicians are attorneys.
So now it makes sense. Create a new income source for all the attorneys and let the reps pay for it with fictitious lawsuits filed by people that want guarantee results but, also want to make 12% per year