Issue link: http://viewer.e-digitaledition.com/i/808278
Pumps the Brakes on the Fiduciary Duty Rule BY LUCAS W. MURRAY, ESQ. PRESIDENT TRUMP ON APRIL 6, 2016, the Department of Labor (DOL) released the Final "Fiduciary Duty" Rule (29 CFR Parts 2509, 2510, and 2550); generally set to go into effect on April 10, 2017. The rule expands the definition of "investment advice f iduciar y " under the Employee Retirement Income Security Act (ERISA), and requires the disclosure of fiduciary conflicts of interest in retirement advice, which, prior to the rule, were not always required to be disclosed to clients. The DOL's intent was to save middle-class families on investment costs. On February 3, 2017, President Trump issued a Presidentia l Memora ndum on Fiducia r y Duty Rule directing the Secretary of Labor to evaluate the rule in order to determine the potential adverse impact on investors, retirees, and the retirement industry. President Trump's stated priorities are to empower Americans to make their own financial decisions, facilitate Americans' ability to save for retirement and build the wealth required to afford life expenses and weather unexpected financial emergencies. Should it be determined that the current rule fails to comport with these goals, the Secretary is directed to propose rescission or revision of the rule. The DOL responded to President Trump's memorandum with one simple sentence: "The Depar tment of Labor will now consider its legal options to delay the applicability date as we comply with the President's memorandum." There are many that support the rule, includ- ing the Certified Financial Planner Board and the Consumer Federation of America Director of Investor Protection, who argue that finan- cial service firms have already begun to make adjustments to implement the rule, with little impact on their investment offerings or price. Moreover, three Courts have recently upheld the rule, finding that the DOL acted within its statutory authority under ERISA. Until further notice, the April 10, 2017, imple- mentation date remains in effect. NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice. Lucas W. Murray is an attorney with the law firm of Krugliak, Wilkins, Griffiths & Dougherty Co., LPA, in Canton OH. n 2 4 2 4