The sweeping regulatory reform from the U.S. Department of Labor (DOL) governing how investment professionals provide retirement advice to Americans became partially effective on June 9, 2017. This change created a higher standard of conduct, known as a fiduciary standard, which advisors must adhere to when providing investment advice on retirement accounts.
The DOL recently announced that the additional requirements related to client account agreements and disclosures that were set to go into effect on January 1, 2018, will be delayed to July, 2019.
What does that mean for retirement savers and the firms that provide them with advice? To answer that question, it’s important to first step back and review a bit of the history of the rule.
The White House first directed the DOL to review the rule in February, asking specifically that the DOL 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 has stated that it would use this delay period to review previously submitted comments in response to questions raised by the presidential memo, to review the rule and proposed exemptions and potentially to propose a new course of action.
We don’t know whether the DOL will make changes to the rule during the review it intends to conduct between now and July, 2019. It may be the case that the rule remains exactly as originally written and currently in force.
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.
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.
So, over the coming months, we will evaluate any changes 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 believed in 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.