Donald Trump campaigned on a platform to "reform the entire regulatory code" and "end radical regulations," arguing they cost jobs, but that doesn't mean he will eliminate the Department of Labor's fiduciary rule anytime soon.
According to a panel of financial professionals discussing the DOL rule at Tuesday evening's Nasdaq Advisor Symposium, a Trump administration may delay the rule from taking effect on April 10, 2017, and/or tweak some components but it is unlikely to quash it … yet. In other words, advisors should continue to prepare for the rule's first enactment in mid-April. Full compliance is not required until Jan. 1, 2018.
"I don't think the DOL rule will be walked back," Thomas Mullooly, the owner and founder of Mullooly Asset Management, a fee-only RIA in Wall Township, New Jersey, told the audience of financial advisors and registered reps. But after the panel, he noted that "there is speculation the rule could be watered down."
But before that happens, Trump would likely want to have his head of the DOL in place, and so far little to nothing is known about his choice.
Mullooly, like almost everyone on the panel, was in favor of the rule – "a plus for all relationships."
"The cat is out of the bag," said Steve Blume, director of fiduciary strategies at RBC Correspondent and Advisor Services. "Clients are starting to ask if we are fiduciaries. Regardless of what happens, generally speaking the direction this is taking is probably good for all our firms…. It's foolhardy to think that it [the rule] will completely go away."
Gregg Zeoli, founder and CEO of Empire Asset Management, noted that the fiduciary rule is emerging during a time of "fantastic opportunity" when $2.4 trillion worth of rollover retirement assets become available for advisors to manage over the next two to three years.
