As we roll into December, the election is nearly a month behind us and the country is waiting to see what President-elect Donald J. Trump’s administration will do over the next four years. Trump and his transition team are in the process of selecting Cabinet members, of which only a few have been announced (this New York Times article) has a list that is regularly updated). As of this blog post, one of those positions that hasn’t been announced yet is Secretary of Labor. So there are quite a few unknowns. Will the President Trump the Fiduciary Rule?
Cutting Federal Agency Regulations
On the campaign trail, Trump declared that 70% of federal agency regulations could be eliminated in order to allow for business and economic growth. Watch Trump’s remarks from early October:
What About The Fiduciary Ruling?
Potentially on the chopping block is the fiduciary ruling, which goes into effect April 2017 - probably. There is a strong possibility that Trump and his administration will revoke the fiduciary ruling. The timing of this isn’t known, and won’t be known until at least January 20 when Trump takes office, and quite possibly longer, considering there are a few things of higher importance.
Delay or Changes to Ruling
The Nasdaq Advisory Symposium met last week and on November 29 a panel of financial professionals think that the fiduciary ruling will be implemented, but potentially delayed or enacted with changes. Another option is a delay in compliance. The general consensus is that it will not be revoked entirely. Part of the reason is that changing a regulation isn’t simple. Once a regulation has been published, Congress must make a disapproval motion within 60 legislative days - which they did but was overruled by a Presidential veto. The only option now is to enact a new bill. That may be problematic for the many firms who have already made changes in order to prepare for the April effect date.
Plan for an April Implementation
The best advice is to continue to plan for an April implementation, keeping in mind that firms have until January 1, 2018, to completely comply. Keep an eye on the news to see the direction the Department of Labor will take, which will be better known once a Secretary has been named.