The financial services industry is begging the U.S. Department of Labor for an even longer delay of the fiduciary rule than a proposed extension to July 1, 2019.
The DOL late last month asked for comment on its proposed delay from the current January 1, 2018 implementation date.
In comment letters, industry groups supported the proposed 18-month delay at a minimum, but said the DOL will probably need even more time to complete the review directed by President Trump, coordinate with the SEC and other regulators, finalize changes, and put the new package and implementation dates out for comment.
Comments were due last Friday. (The DOL is still considering separate comments about possible revisions to the rule.)
With potential changes in the works, firms think a delay to July 2019 won’t be enough.
The Securities Industry and Financial Markets Association said the industry will need 24 months after the rule is finalized to prepare for implementation and avoid a “continued series of starts and stops and piecemeal delays.”
Sifma said the DOL might need until July 2019 just to finish its work.
Wells Fargo Advisors said that if changes were made to the rule, an implementation period of at least three years would be needed. If no changes occur, then 18 months would be needed.
The National Association of Insurance and Financial Advisors (NAIFA) suggested a 24-month delay.
The industry is also asking the DOL to extend its temporary non-enforcement policy. In May, the department promised not to cite or penalize firms during the first phase of implementation, which began in June with enactment of the impartial conduct standards. The temporary non-enforcement policy is slated to end on January 1, 2018.
Financial firms are also blasting an idea floated by consumer groups that a delay should be conditioned on a firm’s promise to use lower-cost products, such as “clean” mutual fund shares.
“Denying relief to a company because it has failed to adopt ‘recent innovations’ favored by the Department is simply not appropriate,” Sifma said.
“The Department does not have the authority or expertise to select products and services it thinks are best for American retirement savers,” the American Council of Life Insurers said. “The Department must abandon its experiment with picking winners and losers and instead provide clear rules that apply to any and all fiduciaries.”