Hurry up and get ready, slow down, stop — I am truly hopeful that this will be my last DOL rule column for quite some time.
The Office of Management and Budget’s recent approval of the delay of the Department of Labor’s fiduciary rule may come with some added avenues for compliance with the rule. Regardless, those advisors who faced the enduring burdens of compliance with some of the rule’s more challenging components (i.e., soft-dollar arrangements, different advisory fees for equity versus fixed income management, and the use of solicitors), can breathe a little easier, for now. Although I am hopeful that smarter people will take a look at this awful rule and make material changes (or, at the very least, provide corresponding “plain English” implementation guidelines), don’t hold your breath — after all, it is government.
The rule entered its transition period on June 9, meaning the definition of “fiduciary” under the Employee Retirement Income Security Act of 1974 and the related acts that constitute fiduciary advice were changed as of that date. The rule’s transition period also supplied a number of technical requirements for compliance with the rule, including adherence to the Impartial Conduct Standards and written acknowledgment of a firm’s status as a fiduciary. These requirements will remain in place until the rule’s new full effective date, which is now presumed to be July 2019, barring further changes.
However, there are hints of even greater revisions to the rule and its compliance requirements on the horizon. The DOL’s rule delay release stated that the agency was “particularly concerned that, without a delay in the applicability dates, regulated parties may incur undue expense to comply with conditions or requirements that it ultimately determines to revise or repeal.”