A game-changing federal regulation on retirement investment advice may be overturned by the Trump administration, but many in the HR industry expect the spirit of the law to remain, even if the letter of the law is repealed.
The fiduciary rule, put into place by the Obama administration, was designed to require that financial advisors act in the best interest of their clients, to ensure that commissions and other considerations do not sway advisors to promote inferior products.
On Feb. 3, President Trump delayed implementation of the rule and ordered the Department of Labor to review it. His administration is highlighting the fiduciary rule as one of several Obama-era regulations that they say are too burdensome and should be undone. Yet among industry insiders, there is a feeling that it may be too late to go back — and some suggest that the change in approach will be popular with consumers.
What has changed
In the past, employers have had a fiduciary responsibility to act in the best interest of the employees when creating and managing company-sponsored retirement benefits. With the new rule, financial advisors who help employers and employees pick plans must also meet the “best interest” standard. The new rule is designed to prevent conflicts of interest caused by some commission-based arrangements.
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