Despite DOL Fiduciary Suspension, Merrill, Morgan Stanley Roll Out Products

Both systems are aimed at ensuring that more advisors are eligible to work with clients as fiduciaries, so that smaller clients continue to receive retirement plan advice even if the fiduciary rule becomes effective in its current form.

A Fiduciary Rule Roadmap

After the President directed the DOL to reevaluate the fiduciary rule (which was finalized in April 2016) and its potential impact on February 3, the DOL proposed a 60-day delay to the fiduciary rule and is still evaluating whether to delay the rule's April 10 applicability date.

However, under subsequent DOL guidance, if the rule has not been formally delayed by April 10 and the DOL issues a final delay after that date, the DOL will not enforce the rule during the "gap" period that occurs during the time between April 10 and the date the final delay is released. Further, if the DOL decides not to delay the fiduciary rule, it will not enforce the rule against firms that do not comply with the rule by the April 10 date, provided that they satisfy the conditions of the rule or applicable prohibited transaction exemptions within a reasonable period after a decision not to delay the rule is published. (See DOL Sends Final Fiduciary Rule Delay Request to OMB.)

If the rule is enacted in its current form (which is now widely unexpected), an advisor would become subject to a heightened fiduciary standard for providing specific investment advice with respect to 401(k) plans and other retirement planning options. The DOL rule does, however, allow advisors to continue to provide general retirement education, such as historical information about different assets, to clients without triggering the fiduciary standard. 

Conclusion

Whether or not the fiduciary rule is here to stay, the move toward making fiduciary-friendly advice available to small business clients indicates a basic shift in the retirement advisory industry—indicating that fiduciary awareness is likely here to stay.