(Bloomberg) -- Companies with exposure to the fiduciary rule, including Stifel FinancialCorp., LPL Financial Holdings Inc. and Primerica Inc., fell afterLabor Secretary Alexander Acosta wrote a WallStreet Journal op-ed saying the measure will take effect June 9with no further delay.

Analysts said that’s a blow to broker-dealers, asset managersand insurers, which had been lobbying Acosta and the White House to keepdelaying the rule while rewriting it. Now the industry will have toabsorb the heightened arbitration and legal risk it had hoped toavoid after President Donald Trump’s election in November, CapitalAlpha Partner’s Charles Gabriel wrote in a note.

Stifel closed down 1.1 percent in New York, while Primericadropped 4.3 percent and LPL fell 1.7 percent.

Acosta wrote that the Labor Department will seek additionalpublic input on the rule but didn’t find a legal basis to adjustthe June 9 date while doing so. The rule requires brokers to putcustomers’ best interests ahead of their own.

Read more: How a Fiduciary Rule Became a Presidential Issue

“While we are disappointed that the Department of Labor haschosen not to further delay the rule until the Department hascompleted a review of the entire rule’s impact on investors, weappreciate Secretary Acosta’s recognition of the rule’s negativeimpact and his desire to seek public input,” Kenneth Bentsen,president of the Securities Industry and Financial MarketsAssociation, said Tuesday in a statement.

The Department of Labor opting not to delay the rule is a netnegative for retail brokers, Nomura Instinet’s Steven Chubak wrotein a note, as it raises questions about the Trump administration’sability to roll back Obama-era regulations. Nomura Instinet cut itsrating on Stifel and reduced its stock price targets for LPL andRaymond James Financial Inc.

A Labor Department spokesman didn’t immediately respond torequests for comment.

Expecting softening

Brokers had fallen along with other financial companies earlierthis month as investors questioned the Trump administration’scapacity to enact its agenda amid the escalating scandal overallegations that the president tried to derail the FBI probe offormer National Security Adviser Michael Flynn.

Some analysts say the rule is likely to be softened in monthsahead and its implementation may be temporary as it’srewritten.

Keefe Bruyette & Woods analyst Brian Gardner highlightsAcosta’s point in the op-ed that the rule is being considered aspart of the administration’s review of financial regulations. KBWthinks that the administration sees the rule as too restrictive andexpects future modification expanding some of the prohibitedtransaction exemptions, including the best interest contract (BIC)exemption.

KBW also expects the Trump administration to explore ways toreduce paperwork and compliance requirements, along with curbing aprovision allowing class action lawsuits.

"The DOL announcement is in line with our general expectationsthat chances for a further delay in the fiduciary rule werediminishing but that further modifications to the rule remain onthe table," Gardner wrote in note.

Annuity companies including Prudential Financial Inc. andLincoln National Corp. have attributed a decline in industrywidesales to uncertainty tied to the fiduciary rule. Sales of theretirement products, which face increased scrutiny under the newregulation, slumped 12 percent to about $52 billion in the firstquarter of 2017 compared to the same period a year earlier.

“We are very disappointed that the entire rule will not befurther delayed so a full examination of the rule can be conducted,as directed by President Trump, before it goes into effect,” CathyWeatherford, president of financial services trade group InsuredRetirement Institute, said Tuesday in a statement.

Even as certain trade groups fought the rule, some insurers haveurged the department to end the period of uncertainty. PrincipalFinancial Group Inc. Chief Executive Officer Dan Houston said inFebruary that sooner or later clarity needed to beprovided since companies operate in a pretty litigiousenvironment.

Related: Read all of BenefitsPRO's coverage on the DOLfiduciary rule

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