“This rule is only as strong as its ability to be enforced. By stripping out the rule’s private enforcement mechanism, and by stating that the Department won’t enforce the rule, the DOL has rendered the rule toothless. This is exactly what the industry rule opponents wanted -- a best-interest-in-name-only standard that leaves the broker-dealer, insurance, and mutual fund industry free to continue draining retirement savers’ hard-earned money with impunity.  This outcome is especially troubling, since many firms in the advisor industry have embraced the rule and were fully prepared to comply by January 1st,” the SOR Coalition stated.

SOR also argued today that the delay is actually a strategic tactic designed to dismantle the rule. “DOL claims it is simply delaying the full implementation and enforcement of the fiduciary rule by 18 months, but delay implies these provisions will become applicable in the near future. However, the Trump Administration has made clear its goal is that these most critical provisions never become applicable. Instead, the Administration’s intent is to use this time to permanently dismantle key elements of the rule,” SOR said.

The securities and brokerage industries who are battling the DOL rule in District Court, lauded the delay today as a victory.

“We applaud the DOL’s decision to delay the remaining portions of its fiduciary rule for 18 months,” said Dale Brown, president and CEO of the Financial Services Institute. “This delay will allow the DOL to conduct a thorough review of the rule, as ordered by President Trump, to ensure investor choice and access to retirement savings advice is protected. In addition to the rule review, we are encouraged by the DOL’s statement that they will coordinate with other regulators, including the SEC, to simplify and streamline the rule.”

Specifically, the DOL has delayed the applicability date of the Fiduciary Rule’s three exemptions for brokers who work with investor’s retirement assets, including: the best interest contract exemption and the class exemption for principal transactions.

SIFMA, which partnered with the FSI and other groups to block the DOL rule in District Court, also hailed the delay.

“While the Department of Labor works to address significant concerns with the rule, the delay will help provide certainty to investors and avoid confusion and cost associated with continued piecemeal delays,” SIFMA President and CEO Kenneth E. Bentsen Jr., said.

“SIFMA’s member firms have long advocated for the creation of a best interest standard, but one that more broadly protects clients and better protects client choice.  The SEC should take the lead in coordination with the DOL to develop such a principles-based standard of conduct for the benefit of investors,” Bentsen continued. 

SIFMA has argued vehemently against pushing forward with the DOL fiduciary rule exemptions, citing among other things the technology, educational and compliance costs firms would sustain for what they say is a temporary rule that will “certainly undergo significant changes” in the future.

The American Council of Life Insurance sent out a statement saying it “lauds” the DOL’s decision to delay provisions of the fiduciary regulation.