The Department of Labor (DOL) spent years creating their 2016 Fiduciary Duty Rule final regulation to define a fiduciary of covered retirement plans. The purpose of the DOL regulation was to protect the retirement plan consumer (IRA owners, 401(k) plan participants, etc.) and create liability for those who give advice which is found to not be in the best interest of the consumer. To achieve this goal, the DOL decided to broaden the definition of who would be included as a covered retirement plan “fiduciary”.
Many investment advisors are very concerned the new regulation will make things more expensive for the smaller investor and some are considering leaving the retirement industry. If there are less advisors in the market, more oversight and internal compliance, and more liability for those who stay in the profession, it will mean higher prices to the consumer. Thus the regulation could hurt the very consumer who was the target of protection in the regulation.
The February 3, 2017 executive order instructs the DOL to delay the implementation of their Fiduciary rule regulations. This order will require the DOL to create an analysis of the impact this regulation is expected to have on both the consumer and the newly defined fiduciaries. The DOL has indicated their Fiduciary Duty Rule final regulation April 10, 2017 implementation date may be delayed due to this executive order.