Trump Victory May Kill DOL Fiduciary Rule
Donald Trump’s surprising presidential victory over Democratic challenger Hillary Clinton may spell doom for the Department of Labor’s fiduciary rule that was released earlier this year. During the campaign, President-elect Trump and one of his principal financial advisors made statements indicating that the new administration would likely kill the new rule prior to its planned implementation.
The fiduciary rule redefines who is considered an investment advice fiduciary under the Employee Retirement Income Security Act of 1974 and attempts to reduce conflicts of interest in retirement investment advice. All who provide retirement investment advice to plans, plan fiduciaries and IRAs are required to abide by a new fiduciary standard that goes into effect on April 10th.
While Trump has not personally expressed his views on the fiduciary rule specifically, in a speech to the Detroit Economic Club in August, he said that he will “issue a temporary moratorium on new agency regulations” once he takes office.
During the same speech, Trump added, “I will ask each and every federal agency to prepare a list of all of the regulations they impose on Americans which are not necessary, do not improve public safety, and which needlessly kill jobs. Those regulations will be eliminated.”
John Harrison, CEO of the Alternative & Direct Investment Securities Association (ADISA) said the trade group is optimistic that the upcoming administration will take an encouraging position in regards to alternative and direct investments.
“Our new president has the opportunity to eliminate the fiduciary rule imposed on the financial services industry by the Department of Labor,” said Harrison. “This regulation would be very destructive to the industry, not ultimately good for investors, and decrease the availability of affordable financial advice to a large swath of working Americans.”
“Given the fact that President-elect Trump and some of his advisors have indicated that his administration would pursue a more reasonable and fair approach to the financial services industry, ADISA believes the alternative investment space stands to benefit and help the nation grow,” he added.
One of Trump’s advisors, Skybridge Capital managing partner Anthony Scaramucci said last month that Trump will repeal the rule if elected.
“We’re going to repeal it,” he said. “It could be the dumbest decision to come out of the U.S. government in the last 50 to 60 years. It’s about like the Dred Scott decision.”
Trump’s inauguration is scheduled for January 20th, less than 90 days before the fiduciary rule goes into effect.
