Initially set to take effect in early April, the sweeping regulatory reform from the U.S. Department of Labor (DOL) governing how investment professionals provide retirement advice to Americans has been delayed. Now, investment firms will now have until June 9 to comply with the Fiduciary Rule.
While additional time to comply with such complex and broad-reaching regulation is welcome, retirement savers are now wondering what impact, if any, the delay will have on their retirement savings accounts and how those accounts are served. Financial advisors, meanwhile, simply want to ensure the level service and quality of advice they are providing to their clients during this prolonged period of uncertainty remains unchanged.
How should investment advisors and their clients proceed in the coming months?
It’s first important to point out that we don’t yet know if rule itself will be revised as a result of the DOL’s review. It may be the case that the rule remains exactly as originally written. Investment professionals and their clients must be prepared for such a possibility.
In the time since the DOL issued its rule, our industry has been working diligently to prepare for compliance. At RBC Wealth Management-U.S., we have expanded training programs for our advisors and we continue to enhance the tools and products advisors need to meet their obligations.
In February, the new administration in Washington, D.C. directed the DOL to consider whether the rule is consistent with the administration’s priority to empower Americans to make their own financial decisions and save for retirement as well as other typical lifetime financial needs. The DOL is using the delay period to invite comments regarding questions raised by the presidential memo, to review the rule and to propose a new course of action. The second applicability date for compliance with the rule remains January 1, 2018.
The primary concern we and others in the industry previously raised about the rule was whether it introduces unnecessary complexity that may make it difficult for investors to obtain the financial services important to them.
In its delay order, the DOL made clear it does not intend to issue any further delays. All investment professionals serving retirement savers must be ready by June 9.
So, over the coming weeks, we will continue our preparations for compliance. At the same time, we will evaluate any changes that the DOL may make, so we can provide our clients with the best possible products and services afforded under the regulation.
At RBC Wealth Management-U.S., we have always done what the rule is asking all firms to do: put the needs of clients first. This commitment will continue, and clients should expect to see that commitment from our financial advisors in action every day.