Understanding the Current Status of the DOL Investment Advice Fiduciary Standard

Two separate district courts in Texas have granted a stay of the effective date of the DOL’s 2024 fiduciary standard and related amendments to PTE 84-24 and PTE 2020-02, which were set to become effective September 23, 2024. The Biden administration's DOL has appealed. As of the date of this publication, the 1975 five-part test continues to apply. However, many firms had already taken steps to comply with the 2016 fiduciary standard and left those policies in place. With Trump once again set to take office, many advisors and firms may be wondering whether now is the time to take steps to dismantle those compliance-related efforts. Assuming the Trump administration allows the existing application standard to die without appeal, the 1975 standard would not clearly apply to rollover transactions. However, note that the U.S. Supreme Court has yet to rule on the issue, meaning that it remains possible that some version of the 2024 fiduciary advice standard could survive. For more information on the status of the fiduciary definition, visit Tax Facts Online. Read More: Link to Q3986.