Contact Bates Today

Bates Group is with you every step of the way. Contact us today for more information on how our End-to-End Solutions can help your firm.

Get My Solution Started

Bates Group Logo

This is a test alert message at the top of the Bates website - Action Link

Bates Research  |  02-08-17

The Beginning of the End of the Fiduciary Duty Rule?


In one of his first acts in office, Donald J. Trump issued a Presidential Memorandum on the DOL Fiduciary Duty Rule. The President directed the Department of Labor to examine the Rule to determine whether it may “adversely affect the ability of Americans to gain access to retirement information and financial advice.” The Memorandum stated that the President wants an economic and legal review of the Rule to ensure that Americans may “make their own financial decisions to facilitate their ability to save for retirement and build the individual wealth necessary to afford typical lifetime expenses, such as buying a home and paying for college, and to withstand unexpected financial emergencies.”

The Rule, set to go into effect on April 10, 2017, raises investment advice standards for all retirement accounts by expanding the circumstances in which persons will be considered “fiduciaries” for plans and individual retirement accounts under ERISA and tax law. If the new Secretary of Labor finds after undertaking the review, that

  1. the Rule has harmed or is likely to harm investors by limiting access to certain retirement offerings, products and advice,  
  2. the anticipated applicability of the Rule has resulted in dislocations or disruptions within the retirement services industry, or
  3. the Rule is likely to cause an increase in litigation and prices to access retirement services,

then he is directed to publish a proposed rule that rescinds or revises the Fiduciary Duty Rule.

We've addressed the history and controversial aspects of the DOL fiduciary rule several times. See our post from April 2016 describing both the fiduciary rule and the DOL Best Interest Contract Exemption; and the Bates Research blog from June 2016, which discusses the passage of the Joint Resolution disapproving and nullifying the Rule, President Obama’s veto of the Joint Resolution, and the filing of three separate lawsuits to block the Rule by the American Council for Life Insurers and the National Association of Insurance and Financial Advisors, the Chamber of Commerce, and the National Association of Fixed Annuities (NAFA).

Reactions to the Presidential Memorandum have been swift. SIFMA, a party to the Chamber of Commerce lawsuit, stated: “the Department of Labor’s fiduciary rule is flawed and is causing harm to retirement savers. SIFMA’s members have long supported a best interest standard for brokers who provide personalized investment advice, but the DOL is not the right agency nor is the DOL rule the right approach.”

NAFA also issued a statement saying it “will continue to monitor all developments regarding the fiduciary rule and work to achieve a positive outcome,” NAFA said its members “await prompt information and clarification about the direction of any new finance-industry lawmaking.”

All eyes are on the expected postponement to the applicability date of the Rule. Acting Secretary of Labor Hugler announced that the DOL will consider delays to the April 10th effective date. In a letter to the Acting Secretary, Senator Elizabeth Warren argued that “nearly every company I heard from affirmed that they will be ready to serve their customers under the rule’s higher standard by April 10, 2017. Any delay or alteration to the rule would have unfair repercussions for the companies that have acted in good faith to implement this rule.”

Bates Research will continue to provide coverage of the changing landscape of financial regulation as the priorities and positions of the Trump administration become clearer.  In the meantime, we encourage you to visit our DOL Fiduciary Duty page with links to additional resources.


Visit Bates on LinkedIn and Twitter to continue the conversation about what financial regulation might look like moving forward. 

Contact Bates Group

Bates Group is with you every step of the way. Contact us today for more information on how our End-to-End Solutions can help your firm.