The election results of Tuesday threaten the Department of Labor’s Fiduciary ruling that mandates financial advisors put their clients’ interest ahead of their own in 401(k)s, individual retirement accounts, and other qualified accounts. The legislation is designed to curb conflicted advice that erodes retirement savings. Meanwhile, several lawsuits have been filed by some in the financial industry who say the ruling will significantly increase liability risk and regulatory costs for financial advisors.
**For the record, our financial advisors are fiduciaries. Based in Des Moines, Iowa, our firm serves our client’s best interest, first and foremost.
Before the election on Tuesday, one of Trump’s advisors, the managing partner of Skybridge Capital, Anthony Scaramucci, said that Trump “is going to repeal it.”
Now that the White House, Senate, and House are controlled by Republicans, there is intense speculation on whether the DOL ruling will survive. Previous attempts were vetoed by Obama.
GOP leadership could also push to overhaul the Dodd-Frank financial reform law, which includes a measure to halt the DOL rule. Democrats will have enough members in the Senate to run a filibuster.
What does this mean for Des Moines families seeking financial planning services?
Many firms are still proceeding with the assumption that the DOL ruling will stand. Skip Schweiss, managing director for advisor advocacy at TD Ameritrade Institutional, believes it is “possible, it’s not probable,” that the DOL ruling will be repealed. He believes the odds of the ruling surviving “are pretty good.”
In order to repeal the DOL ruling, the Trump administration must propose a new rule and go through the full regulatory process, which requires allowing comments on the measure, modifying, then finalizing. Stuart Shapiro, professor of public policy at Rutgers University, said, “It will take at least a year” or possibly longer to repeal the DOL ruling. Alternatively, the Trump administration may issue an emergency rule to delay implementation of the current rule, scheduled to begin April 10, 2017.
Regardless of what happens to the DOL ruling, for those in Des Moines or elsewhere seeking financial advisors, a safe bet would be to inquire if your potential advisor is a fiduciary.
If you have any questions on the DOL fiduciary ruling, please call 515-557-1860 or email us at firstname.lastname@example.org.