Advisors need to prepare as though the Department of Labor’s fiduciary rule will become applicable on April 10, regardless of the likelihood that the Trump administration will delay and then modify or repeal the rule, say two attorneys.

Fred Reish and Brad Campbell, attorneys at Drinker Biddle & Reath, emphasized this message during a quarterly “Inside the Beltway” call the law firm held on Thursday, January 26.

Their view is based upon legislative logistics as well as what they think makes good business sense -- particularly with rollovers.

Although Drinker Biddle expects to see a delay, “The DOL fiduciary rule itself is not something that can be just whisked away with a stroke of the pen,” said Campbell, a nationally recognized expert on employer-sponsored retirement plans and a former Assistant Secretary of Labor for Employer Benefits.

Because the rule actually went into effect last June, it’s not subject to President Trump’s recent regulatory freeze and would have to be modified, repealed or delayed largely through notice-and-comment rulemaking, said Campbell.

“The rumors that we’re hearing, for what that’s worth, is that the first action would be to delay the rule by about six months,” he said, “and then do a formal notice-and-comment for a longer delay, say of a year.”

Informally, word is the Trump administration is looking more at a repeal approach, said Campbell, but the personnel who’ll be making the final decisions on the DOL rule have yet to be appointed and confirmed. Once the administration has its people in place, more useful and robust conversations can be held with regulators to find out what their plans are, said Campbell.

Reish, who chairs Drinker Biddle’s financial services ERISA team and retirement income team, suggested advisors pay close attention to how they capture and make recommendations for rollovers of employer-sponsored retirement plans. Even if the DOL rule goes away, there’s still FINRA regulatory notice 13-45, which has a fiduciary-like component, and other guidance, he said.

And with approximately 10,000 people retiring each day -- with most of them rolling over to IRAs and most of them 62 or older, said Reish, “it’s inconceivable to me that this area does not become more regulated.”

Campbell said there is Congressional interest in the fiduciary rule from both the Erisa and Securities and Exchange Commission avenues. He thinks Congress will wait to see what the Trump administration does with the DOL rule before taking action. Ongoing litigation against the rule remains another layer of uncertainty, he added.

But Reish thinks one thing is certain. Regardless of whether there is a DOL fiduciary rule, some of the decisions to move more to level-fee advice “are baked into the cake,” he said. “I think it’s beyond a compliance issue now, that’s a business model, and the decisions in some cases are permanent.”