The Department of Labor has delayed the implementation of the fiduciary rule by 60 days, according to filing in the Federal Register.
The move comes after Labor Department in February proposed a delay after President Trump ordered a review.
During the 15-day comment period on whether to delay implementation, the Labor Department received approximately 193,000 comments, the department says in its 63-page filing. In that deluge, wealth management firms and some advisers pushed for the rule to be postponed lest they have to make changes to client relationships multiple times. Baird and other firms, fearing costly disruption to their business strategy, went further, requesting an even longer delay of up to a year or more.
"No retirement investor's interest will be served if the fiduciary rule goes into effect before we have certainty on the products and services that can be provided under the final rule," the Milwaukee-based firm says in its letter, which is available on the Labor Department's website.
Industry trade group FSI was quick to applaud the Trump administration's move.
“We are confident the administration understands our deep concerns for small investors, and today, once again, they showed they share these same concerns,” FSI wrote in a statement
THE NEXT ROUND
Though delayed, the fiduciary rule is not yet dead.
Trump's memo on the regulation asked for a review, and outlined criteria to amend or overturn it entirely. Critics have said those criteria are too broad. Advocates and opponents of the rule will now jockey to influence the Labor Department as it conducts its review and considers possible changes.
It's not clear how long that process may take. But the department first proposed a fiduciary rule in 2010, only to pull it back and rework its design, re-introducing a fiduciary standard in 2015. The Labor Department went through a lengthy process, which included several comment periods, prior to unveiling the current regulation approximately a year ago.
Advisor Group CEO Jamie Price said in an interview hours prior to the announcement that his firm was ready to implement its compliance plans for the fiduciary rule.
"We're ready to go in mailing out the BIC and putting in new class shares," Price said. "We'd rather operate that way rather than be caught flat footed."
His firm has more than 5,000 independent advisers. Advisor Group, like other firms, has been rolling out a number of platform changes and upgrades intended to enable advisers to operate in a fiduciary oriented environment. Price said many of these changes would remain.
When asked what his position was if the rule was delayed, Price said he thought there could be room to tweak the rule to improve its workability for advisers and clients.
"I think we'd be fine with that," he said.
Price added that the end goal should a fiduciary standard, and that the industry could take different paths to arrive there.
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