Blog DOL Fiduciary Rule to Take Effect June 9, 2017

Posted May 23, 2017 by Julia Binder

In an op-ed published in the Wall Street Journal on the evening of May 22, 2017, US Secretary of Labor Alexander Acosta confirmed that the agency’s fiduciary rule will begin taking effect on June 9, 2017.

Acosta wrote that careful review has found “no principled legal basis to change the June 9 date," and that “respect for the rule of law leads us to the conclusion that this date cannot be postponed.”

The announcement represents a victory for supporters of the rule, which requires financial advisors to act in the best interests of their clients in retirement accounts. The rule’s implementation was delayed for 60 days, from April 10, 2017 until June 9, 2017, while the Department of Labor (DOL) reassessed the regulation in response to a directive from President Trump. The Department has adopted a phased implementation approach, with final implementation of the Rule on January 1, 2018.

A lengthy Q and A document prepared by the DOL addresses questions firms may have during this transition period. While each broker-dealer will take their own approach, it is likely that some broker-dealers that haven’t previously announced their intentions may be forced to temporarily suspend certain investments into retirement accounts while implementing the Best Interest Contract Exemption (BICE) or permanently stop certain investments into retirement accounts.

As we have written before, regardless of the outcome of continued review of the DOL fiduciary rule, leading asset managers and distributors recognize that regulatory change is just a small part of the transformative changes disrupting the asset management industry. Most of them are hard at work finding opportunity in unstoppable industry trends that support the push toward a fiduciary standard of care, including the growing demand for lower-cost passive investment products, the shift to fee-based accounts, and the use of automated digital advice.




Julia Binder
Head of Strategic Marketing Research
DST Distribution Solutions

categories: distribution strategy, mutual funds, dol fiduciary rule

The views expressed in this publication are solely those of the author and do not necessarily reflect the position or policy of DST Systems, Inc. or its affiliates, subsidiaries, joint ventures, officers, directors, or management.




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