Industry officials agreed Tuesday that while there could likely be a delay in the Department of Labor's fiduciary rule, outright repeal of the rule is unlikely, so advisors and broker-dealers should continue to get ready for the April compliance date.
“I think there will be some level of delay involved” in the rule's implementation deadline, said Blaine Aikin, head of fi360, which provides fiduciary tools and education, “but it will go into effect, largely intact.”
Skip Schweiss, head of advisory advocacy at TD Ameritrade Institutional, agreed that a delay could be in the offing, but doubts the rule is “dead.” The DOL fiduciary rule “is final,” he said on a panel with Aikin at the MarketCounsel Summit in Miami Beach. “To undo the rule would require a new rulemaking. While I do think a delay is likely, I don't see a flat-out repeal. Maybe delay by a modified rule [via] a deal in Washington.”
Even a delay, Schweiss continued, requires a new rulemaking, with a new Labor secretary having to be nominated and then confirmed by the Senate. “There's 80 days between the Jan. 20 [presidential] inauguration date and the [DOL rule's] April 10 compliance date. Not a lot. We likely aren't going to know about some sort of delay, at minimum, by February or March.”
Schweiss warned that financial institutions calling a “time out” on their compliance with the rule are “taking a real risk with your business.”
Aiken agreed, saying: “You can't safely assume the rule will be delayed, and I don't think the marketplace [is] going to move back” from the compliance measures they've already implemented.
“I don't think you can safely assume the rule will be reversed, and I don't think the market can go back. We've already seen commitments on the large firms to make changes and they've indicated that won't move back.”
Knut Rostad, president of the Committee for the Fiduciary Standard, who sat on the panel with Aikin and Schweiss, agreed that advisors and broker-dealers should move forward with compliance. “I wouldn't put things on hold,” he said, noting that while there will be “uncertainty” for a while about the rule, he acknowledged “there could be changes around the edges and there could be changes at the core.”
Brian Hamburger, who heads the regulatory consulting firm MarketCounsel and has been an opponent of DOL's fiduciary rule, said in separate comments during the event that “we told advisors there's no prize being handed out at the finish line” regarding compliance with the rule. There are “too many variables to decide now how to comply; even now it's questionable how much resources we're going to put in.”
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
