Labor Secretary Alexander Acosta announced Monday night that he will not delay the controversial fiduciary rule any further.
Writing in a Wall Street Journal opinion piece, Acosta said that “we have carefully considered the record in this case, and the requirements of the Administrative Procedure Act, and have found no principled legal basis to change the June 9 date while we seek public input.”
“Respect for the rule of law leads us to the conclusion that this date cannot be postponed," the secretary wrote.
Acosta graduated Harvard Law School and spent his entire career building an impressive legal resume, which led some analysts to predict he would act cautiously. While the DOL will continue to study the rule and can change some aspects of the second part of the phase in, allowing the June 9 date to stand means the fiduciary rule is likely here to stay.
The decision is a win for the Obama administration and consumer groups, which pushed for the fiduciary rule for virtually all eight years of the former president's term. New President Donald J. Trump ordered a delay in a Feb. 3 memo, and the DOL published a 60-delay, which pushed the applicability date from April 10 to June 9.
But Acosta wasn't sworn into office until late April, which made it hard for him to influence the process.
Come June 9, agents and advisors must fulfill three main criteria when selling products using retirement dollars: act as a fiduciary, accept only reasonable compensation, and make no "materially misleading statements."
What constitutes "reasonable compensation" is the great unknown. The remainder of the fiduciary rule will take effect Jan. 1, 2018. It mandates significant disclosures and a contract signed by client and agent/advisor.
Check back with InsuranceNewsNet for more on this issue in the days ahead.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].
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