DOL Grants 60-Day Delay on Applicability of Fiduciary Rule, But Hope of Rescission Fades
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- Despite the direction from the President to reexamine the rule and determine whether it should be rescinded, the Revised Fiduciary Rule and newly created Impartial Conduct Standards will take effect on June 9, following a 60-day delay of the original applicability date.
- Starting June 9, a recommendation regarding the investment of the assets of an employee benefit plan or IRA must comply with the “Best Interest Standard.” This means that any such recommendation given must be made without regard to the financial or other interests of the adviser or financial institution making the recommendation.
- Even though most of the procedural aspects required to comply with the new fiduciary rule will be postponed until January 1, 2018, from and after June 9, 2017 institutions and their advisers will be subjected to significant risks when receiving transaction-based compensation for providing investment recommendations to IRAs and smaller ERISA plans, or when recommending that plan participants and IRA beneficiaries effect rollovers of their account balances.