A game-changing federal regulation on retirement investmentadvice may be overturned by the Trump administration, but many inthe HR industry expect the spirit of the law to remain, even if theletter of the law is repealed.
The fiduciary rule, put into place by the Obamaadministration, was designed to require that financial advisors actin the best interest of their clients, to ensure that commissionsand other considerations do not sway advisors to promote inferiorproducts.
On Feb. 3, President Trump delayed implementation of the ruleand ordered the Department of Labor to review it. Hisadministration is highlighting the fiduciary rule as one of several Obama-eraregulations that they say are too burdensome and should be undone.Yet among industry insiders, there is a feeling that it may be toolate to go back — and some suggest that the change in approach willbe popular with consumers.
What has changed
In the past, employers have had a fiduciary responsibility toact in the best interest of the employees when creating andmanaging company-sponsored retirement benefits. With the new rule,financial advisors who help employers and employees pick plans mustalso meet the “best interest” standard. The new rule is designed toprevent conflicts of interest caused by some commission-basedarrangements.
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