“The key question of whether any significant revisions to the rule will be forthcoming—or [if the rule is rescinded] entirely—will probably not be resolved until sometime after the 60 day extension,” said Tittsworth in an emailed statement.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.