New DOL head Acosta, who had not previously spoken publicly about the rule, announced yesterday that there would be no more delays of the fiduciary rule before the June 9th applicability date. As the debate over extending this standard to the realm of retirement products began to go public, many of them have spoken out, saying that they could see no reason why being obliged to put their clients' interests ahead of their own when selling them financial products should not be mandatory for those selling insurance products and retirement plans.
The fiduciary rule, finalized by the Obama Labor Department in 2016, requires certain financial advisers to disclose potential conflicts of interest to clients.
Securities industry officials vowed to continue fighting for change despite losing their attempt to delay the fiduciary rule's implementation date.
"The Labor Department will roll back regulations that harm American workers and families", he said. Jaret Seiberg, an analyst with brokerage and investment bank Cowen & Co., said in a research note that he expects a delay in implementing that part of the rule of as long as a year and believes the Labor Department ultimately will propose eliminating the ability of customers to file class-action suits. The association was founded in 2003 and has approximately 4,500 members who are key decision makers, representing more than 220,000 professionals throughout the nation - including sponsor members who have raised in excess of $200 billion in equity and serve more than 1 million investors. The announcement that the rule will go into effect in a few weeks serves as a major victory for advocates of the regulation, which has faced intense opposition from Wall Street firms and Republicans from the start. "Accordingly, during the phased implementation period ending on January 1, 2018, the department will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions".
Supporters of the rule say the regulation is necessary to protect consumers from abusive practices.
In the memorandum, Trump said that the rule "may significantly alter the manner in which Americans can receive financial advice, and may not be consistent with the policies of my Administration".
The DOL's intention to issue a Request for Information (RFI) "in the near future" for additional public input on "specific ideas for possible new exemptions or regulatory changes based on recent public comments and market developments".
Business groups and financial firms detest the rule and challenged it in court soon after it was promulgated.
But Consumers Union urged the Labor Department to "resist industry-led efforts to diminish or weaken the rule and the important protections it provides". "That is a fantasy", she said.