President Issues Executive Memorandum Requiring DOL to Examine the Fiduciary Duty Rule

 
Friday, February 10, 2017
 

President Donald J. Trump recently issued a Presidential Memorandum on the Fiduciary Duty Rule. The term "Fiduciary"; Conflict of Interest Rule Retirement Investment Advice, 81 Fed. Reg. 20946 (April 8, 2016) (Fiduciary Duty Rule or Rule), may have bearing on the way that people can receive financial advice.  The President has directed this Memorandum to the Department of Labor (DOL) for review.  

The DOL is to examine the Fiduciary Duty Rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice. As part of this examination, the DOL will prepare an updated economic and legal analysis concerning the likely impact of the Fiduciary Duty Rule.  This analysis will consider:

(i) Whether the anticipated applicability of the Fiduciary Duty Rule has harmed or is likely to harm investors due to a reduction of Americans' access to certain retirement savings offerings, retirement product structures, retirement savings information, or related financial advice;

(ii) Whether the anticipated applicability of the Fiduciary Duty Rule has resulted in dislocations or disruptions within the retirement services industry that may adversely affect investors or retirees; and

(iii) Whether the Fiduciary Duty Rule is likely to cause an increase in litigation, and an increase in the prices that investors and retirees must pay to gain access to retirement services.

If the DOL finds that the considerations identified or concludes for any other reason after appropriate review that the Fiduciary Duty Rule is inconsistent with the priority identified in the Memorandum then the DOL is to publish for notice and comment a proposed rule rescinding or revising the Rule, as appropriate and as consistent with law.

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