The Investment Program Association sent a letter to President-elect Donald Trump’s transition team on Tuesday requesting the new administration delay implementing the Department of Labor’s fiduciary rule.
The fiduciary rule redefines who is considered an investment advice fiduciary under the Employee Retirement Income Security Act of 1974. 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.
“In the days since the election, there has been renewed speculation that the Department of Labor’s Fiduciary Standard rule could be rescinded by the incoming Trump administration,” said Tony Chereso, president and CEO of the IPA, in the letter. “The IPA is working closely with our partners across the industry to thoroughly understand the potential outcomes of this important crossroads.”
The IPA noted that the Trump campaign has signaled its willingness to eliminate or amend the rule and that a new Labor Secretary will be appointed by the Trump administration as early as January 2017. In addition, the IPA believes that legislative action to repeal the rule in the interim is unlikely.
“This rule threatens to not only make retirement advice costlier and more complex for working Americans who are trying to make sure they can afford to retire, but it has created significant implementation costs and compliance concerns for the companies that provide financial advice to millions of Americans,” Chereso added.
Although the IPA believes that it is unlikely that the rule will be eliminated entirely, it could be delayed, postponed, rewritten, or the new labor secretary could use a “good cause interim rule” to replace the existing version.
In the meantime, the IPA recommends that its member firms continue with their implementation planning. To read the IPA’s letter to the Trump transition team, click here.