Fiduciary Rule Could Be Up for Substantial Changes

By Sean Forbes

Nov. 9 — The Department of Labor’s final rule holding all financial advisers handling retirement accounts to a fiduciary standard could be off to a rocky start under a Donald Trump administration.

Advisory firms have already poured hundreds of millions of dollars, if not more than $1 billion, into preparing for the rule’s effective date on April 10, Bradford P. Campbell, counsel at Drinker Biddle & Reath LLP, in Washington, told Bloomberg BNA. Industry commenters have established a “pretty good record” that the effective date was too aggressive, so Trump could give the industry more time to get ready.

The rule is one of President Barack Obama’s centerpieces of his middle-class economic agenda, but was overwhelmingly panned by Republicans in both the House and Senate.

“What I think is certain is that we will see substantive changes in this rule, whether they come from Congress or the Trump administration,” Campbell said.

That doesn’t mean that the rule is history, Knut A. Rostad, president of the Institute for the Fiduciary Standard, in Washington, told Bloomberg BNA. Rostad has been a strong supporter of the fiduciary rule.

“There shouldn’t be a rush to judgment about the fiduciary rule,” Rostad said. “Three things stand out: Wall Street opposition has weakened, Merrill Lynch has publicly applauded it and Trump’s instinct to challenge the status quo in his own party can’t be understated,” he said. New York-based Bank of America Merrill Lynch is one of the largest investment advisory firms in the U.S., with more than 15,000 advisers and about $2.2 trillion assets under management.

The Trump administration could also postpone the rule’s effective date to allow for more comments, Kent A. Mason, a partner and retirement benefits specialist at Davis & Harman LLP in Washington, told Bloomberg BNA. “What I think they should be doing is not prejudging it, but invite comments so they can get input and make their own informed judgment,” Mason said.

Advisory firms are in a “difficult place” while they wait to see what happens next year, but will continue to prepare for the rule, Mason said.

To contact the reporter on this story: Sean Forbes in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

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