Rumors of the fiduciary rule’s death may be greatly exaggerated, according to one industry official.
Advisors at the 2017 TD Ameritrade National LINC conference in San Diego were abuzz about an executive order signed by President Donald Trump on Friday that many believe spells the end of the DOL’s regulation slated to take effect on April 10.
The only problem, said Skip Schweiss, TD Ameritrade Institutional managing director for advisor advocacy and industry affairs, is that Trump’s executive order does no such thing.
“I’m seeing a lot of what I would consider to be misleading headlines that say things like ‘president issues order to stop the DOL rule’ or ‘Trump signs order to delay the DOL rule,’” says Schweiss, a long-time advocate of fiduciary advice. “I’m being stopped by advisors saying ‘big news, the DOL is a goner,’ but that’s not the case.”
Instead, said Schweiss, Trump’s order, which instructs the DOL to conduct a more extensive review of the rule’s potential economic and legal impacts. If the department requires more time to conduct its review, the order also authorizes the DOL to extend its enforcement date.
Under the rule, advice given within any retirement account would be held to a more stringent standard of conflict-free advice, a simple shift that has sent shockwaves through almost every aspect of the financial industry.
Since the rule is not legislation, nor an executive order, it cannot be easily overturned, said Schweiss.
“The enforcement date cannot be pushed back by executive order because it’s a final rule,” Schweiss said. “Congress cannot kill or delay this rule. There’s been a lot of misinformation on that.”
Furthermore, alteration or repeal of the rule would require a similar process to the rule’s creation: another period for comment and review that could extend for months or years.
As of Friday afternoon, Schweiss said the rule is still slated to be enforced on April 10 until the DOL reports otherwise.