Description: The U.S. Department of Labor has implemented a 60-day extension of the applicability dates of the fiduciary rule from April 10 to June 9, 2017. The announcement follows a presidential memorandum issued on February 3, 2017, which directed the department to examine the fiduciary rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.

Fair Economy Impact: The rule simply requires financial advisers to provide what most clients probably already think they are receiving: advice about their retirement plans untainted by conflicts of interest. It would prohibit common practices such as steering investments to companies that pay the adviser a commission. The financial industry strongly opposes this rule because it wants to preserve a system that allows financial advisers to give their clients advice that is in the adviser’s interest rather than the client’s. Conflicted advice leads to lower investment returns, causing real losses—an estimated $17 billion a year—for the clients who are victimized. The delay of the rule, ostensibly to further investigate its impacts, is a thinly veiled attempt to kill it. As part of the rulemaking process that the Department of Labor undertook to finalize the fiduciary rule, the department prepared a 382-page cost-benefit analysis examining in detail the expected economic impact of the rule. This was the culmination of a roughly six-year process that incorporated the feedback from four days of hearings, more than 100 stakeholder meetings, and thousands of public comments. Delaying the rule to revisit questions that have already been so thoroughly investigated is irresponsible and unjustifiable. Delaying the rule will cost retirement savers $3.7 billion over the next 30 years.

Actions:

• Hearing: Subcommittee on Health, Employment, Labor and Pensions May 18, 2017
• Rule implementation delayed until June 9, 2017.
• Delay issued April 7, 2017.