The new Department of Labor rule was to require that financial advisors act as fiduciaries on behalf of their investment clients; i.e., to put their clients best interest before their own profits.
With the deadline for compliance now moved to July 1, 2019, the rule that was created to curb abuses by financial advisors handling retirees’ investments has a long way to go before it becomes law. According to nj.com’s article, “Trump adds new delay to Booker-backed rule designed to help retirees,” not only has the deadline for compliance been moved, but the DOL said it would review public comments and consider making changes to regulations that had been finalized previously.
Senator Cory Booker joined then-President Obama at a press conference to propose new rules to protect workers against conflicts of interest among some financial advisers.
"Enough is enough," Booker said at the time. "It's time to finally enforce these rules and ensure that every financial advisor prioritizes their clients' interests over their own."
"Those financial advisers more concerned with their bottom line than with helping customers, will now have 18 more months to ignore new consumer-friendly rules that protect Americans' retirement savings from bad investment advice and hidden fees," Booker said.
Then-candidate Trump attacked Wall Street during his presidential campaign, but still put the new rules on hold while his administration reviewed them.
Labor Secretary Alexander Acosta said the president had no legal basis to delay the regulations from taking effect beginning June 9, even as the agency continued its review.
The president and chief executive of the Securities Industry and Financial Markets Association commented that the delay will avoid confusion and costs associated with piecemeal delays as the Department of Labor works through concerns about the rule.
While many in the financial industry were pleased with the latest announcement, how you feel about the delay probably depends on whether you are an investor or a financial advisor.
Reference: nj.com (November 28, 2017) “Trump adds new delay to Booker-backed rule designed to help retirees”