After the U.S. Department of Labor announced a formal attempt to delay its fiduciary rule, supporters and opponents of the rule reacted with skepticism, relief and confusion.

The DOL on Wednesday released statements indicating it was seeking issuance of a new rule that would delay enforcement of the fiduciary rule 60 days beyond its April 10 applicability date, a process expected to take at least 16 days.

“The DOL’s proposed fiduciary rule delay marks a new period of limbo,” said Mike Walters, CEO of Ada, Mich.-based USA Financial in emailed comments.

Walters said he expects the Trump administration will streamline the rule and enhance its economic benefits. The administration could also defer to the SEC for a "more all-encompassing plan" that could benefit investors and financial professionals, he added.

“It is difficult to imagine that the idea of 'best interest' will be vacated entirely now that it has been in the spotlight," Walters said.

The fiduciary rule establishes stricter "best-interest" standards for advisors' investment recommendations given for retirement accounts. Proponents of the rule argue that the standard should be applied to advisors of all retirement advice-seekers, while opponents  argue the more stringent regulations will make it more difficult for Americans to access financial planning services.

Though the rule technically became effective last summer, most of its provisions were set to become applicable to advice-providers in April, with full applicability slated for 2018.

After news of the DOL decision to seek a delay broke, many advisors and industry watchdogs were unsure what it meant for the rule, which went into effect after years of comment and review.

“We don’t feel that anyone truly knows the outcome of the DOL rule and its subsequent impact on the industry,” said Anthony Stich, director of global marketing at Advicent, a fintech firm with a focus on compliance. “If firms are paying close enough attention, they will quickly take notice that the executive branch and the judiciary branch are both on different tracks with regard to the rule.”

The DOL, in deciding to seek a delay, referred to a Feb. 3 memorandum from President Donald Trump calling for a review of the fiduciary rule’s economic impact. After the proposal to delay the rule is reviewed, the DOL will enter a 45-day comment period regarding the president’s memorandum.

Skip Schweiss, TD Ameritrade managing director for retirement plan services and advisor advocacy, told Financial Advisor on Wednesday that the DOL might not be successful in its attempt to delay the April 10 implementation date.

Like Schweiss, David Tittsworth, counsel in the investment management practice of Boston-based Ropes & Gray, argued that even if the DOL is able to delay the rule for 60 days, it is unlikely to be able to conduct its review within that time.

“The key question of whether any significant revisions to the rule will be forthcoming—or [if the rule is rescinded] entirely—will probably not be resolved until sometime after the 60 day extension,” said Tittsworth in an emailed statement. “The content of the DOL’s review obviously will be a major factor in what happens next.”

Supporters of the rule were skeptical that the DOL’s latest proposal was merely to examine the rule's economic impact Lisa Donner, executive director of Americans for Financial Reform, argued in a prepared statement that the DOL delay proposal was a “betrayal” of the public interest.

“This proposal to delay the fiduciary rule is clearly part of the administration’s plan to undo it altogether,” Donner said.

Most continued to argue that while the future of the regulation is still uncertain, the movement towards a higher fiduciary standard for advice has already been embraced by investors and by most of the industry—and the issue has increased in visibility to the point that advisors would be unwise to change course.

Stich says that Advicent plans to continue to work with its clients on compliance workflow technology implementations, rather than allow its clients to risk running afoul of the regulations. Like Advicent, SEI Advisor Network is recommending that its advisor clients stay the course.

“The fiduciary rule may be delayed, but the fiduciary movement continues,” said John Anderson, managing director of practice management solutions at SEI Advisor Network, in emailed comments. “Advisors would be wise to continue down the path of implementing a full fiduciary business even with the delay in the  DOL rule as clients and fiduciary competitors will continue the drumbeat of putting client’s best interest first.”

Opponents of the rule, who have watched legislative and legal attempts to stymie the rule fail in recent months, cheered the announcement.

The American Council of Life Insurers (ACLI), representing the bulk of the life insurance and annuity industry in the U.S., believes that the delay will give the DOL the necessary time to review and to uncover what it believes are “significant problems.” 

“The proposed delay is necessary,” wrote Dirk Kempthorne, ACLI president and CEO. “The regulation, as currently written, limits consumers’ choices, significantly harming their ability to plan and to save for financially secure retirements.”

The Financial Services Roundtable, an industry organization for diversified financial services firms, advocates for a uniform best-interest standard to be implemented for all investment accounts, rather than different standards for advice given in retirement accounts, said roundtable CEO Tim Pawlenty.

“Such a requirement should be implemented without miles of bureaucratic red tape,” said Pawlenty in released comments. “The DOL rule will lead to fewer retirement savings choices for many Americans and we are encouraged the DOL is proposing to delay this rule.”

Thomas Donohue, president and CEO of the U.S. Chamber of Commerce, also supported the DOL’s proposal, arguing that his organization’s opposition to the fiduciary rule is about ensuring consumer choice and access to retirement strategies.

“We commend the Department of Labor for its swift action to protect retirement savers,” said Donohue in released comments."Our goal is to strengthen our nation’s retirement system so it meets the retirement needs of small business owners, employees, and retirement savers.”

Scott MacKillop, CEO of Denver-based First Ascent Asset Management, believes that the claims of the rule’s opponents, like the DOL’s latest proposal, are actually about killing a regulation that would protect everyday consumers.

“This is just another step toward burying a rule that was designed to provide basic fiduciary protection for retirement plan participants,” MacKillop said in emailed comments. “The truly reprehensible part of this action is that the rule’s opponents are cloaking themselves in pro-consumer rhetoric while gutting a bill designed to protect hardworking Americans from predatory sales practices. While claiming to act in the interests of investors, the anti-rule forces are dancing to Wall Street’s tune and protecting the profits of the financial services industry. They should be ashamed.”