The Future of Fiduciary: What You Should Know Now

On Friday, February 3, President Trump signed a memorandum directing the United States Secretary of Labor to perform an “economic and legal analysis” of the U.S. Department of Labor (DOL)’s investment fiduciary rule for retirement plan advice.1

If the results of the analysis expose issues within the regulation (as defined by the evaluation criteria outlined in the memorandum), the Secretary will be instructed to propose a new rule for public notice and comment, “revising or rescinding” the previous fiduciary rule.2 You can read the full memorandum here.

The DOL's fiduciary rule under Trump

A quick, basic breakdown

If you’ve kept a pulse on potential policy changes under the new administration, you’ve probably heard just about everybody — from the media to politicians themselves — put forth predictions about how President Trump will handle the fiduciary rule, which legally requires investment advisors that serve retirement plans to put their clients’ best interests first. In fact, many speculated that he would sign an executive order to axe the rule altogether in the weeks following his inauguration

However, it’s extremely important to note that the final memorandum issued by the President on February 3 was not an executive order. One noteworthy difference between Trump’s draft plan and this new issuance is that it does not include a 180-day delay for implementation of the fiduciary rule, which is scheduled to start on April 10.

However, the DOL filed a request with the Office of Management and Budget (OMB) on February 10, a week after Trump’s memo, to delay the rule’s implementation date for 180 days to provide time for review of the regulation. The DOL has also filed a request to open another round of public comment on the rule.

The main takeaway? The fiduciary rule has not been stopped at this point, contrary to many reports.

Rather, the President has instructed the DOL to review the regulation, and pending the results of its analysis, start the process of developing a new version of the rule or repealing it altogether. In any case, implementation looks to be delayed 180 days, so we will have to wait and see what comes of the DOL’s review using the guidelines in President Trump’s memo.

Still, keep in mind that it took the DOL nearly six years to issue the current version of the fiduciary rule — so there’s a good chance we won’t see any significant changes in the regulation for some time.

The impact on your business and retirement plan

As a registered investment advisor (RIA), our firm has always upheld the fiduciary standard of care; that will never change, regardless of what lies ahead. Moving forward, our clients can continue to expect the same level and quality of service they’ve always received from our firm.

At the same time, we’re committed to keeping you educated and informed about the latest changes to the retirement plan marketplace and landscape; therefore, we’ll continue to communicate any news or policy changes that could have an impact on you.

Have general questions or concerns about the fiduciary rule? Feel free to contact a member of our advisory team; we’re happy to help you gain a better understanding of the regulation, as a whole, and everything we know about next steps moving forward. In the meantime, you can also click the button below to learn more about the fiduciary standard of care and what it means for investors like you.

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Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional. Hewins does not provide tax, accounting or legal services.
OneBite Editorial Staff
OneBite Editorial Staff

OneBite® is a Top 50 Financial Advisor Blog powered by Hewins Financial Advisors. Founded in 2011, the digital magazine is dedicated to providing intelligent, in-depth coverage and analysis of the top financial and economic issues facing investors today.

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The Future of Fiduciary: What You Should Know Now

time to read: 2 min