An Update on the DOL Rule's Outlook - And What It Means for You

DOL rule updates blog post

Having been created by the Obama administration, the DOL fiduciary rule would bring wide, sweeping changes to the financial services industry. But as we noted in prior articles, a Trump administration could make this a different story. There was potential for the rule to be delayed past its April 10, 2017 “applicability date,” to undergo changes, or to even be abolished.

Since we first published on the DOL rule and its possible effects, there have been developments. Now the Trump administration has directed the Department of Labor to conduct an analysis of whether the rule could have any harmful effects, especially on retirement investors. That could potentially put the fiduciary regulations at jeopardy, depending on the department’s findings.

Because it is important to know how these news events may affect your future, let’s cover them in detail. Without further ado, here is a timeline of recent news updates, and how they may affect the outlook of the ruling.

Friday, February 3 – Trump issues memorandum on DOL Rule

On February 3, 2017, the White House put out a presidential memorandum on the DOL fiduciary rule. The memo starts off by acknowledging an administrative priority is:

  • “To empower Americans to make their own financial decisions,”
  • “To facilitate their ability to save for retirement and build the individual wealth necessary to afford typical lifetime expenses, such as buying a home and paying for college,”
  • “and to withstand unexpected financial emergencies.”

The importance of the statement of this priority will be clear in a moment. Afterward, the memo asserts the rule “may significantly alter the manner in which Americans can receive financial advice.”

As such, the president directs the Department of Labor to “examine the Fiduciary Duty Rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.” To that end, the DOL must complete a new economic and legal analysis of three potential impacts:

  • Does the rule hurt consumers by limiting their access to retirement savings options, retirement product structures, savings information, or other related advice?
  • Does the rule cause dislocations or disruptions in the marketplace which may pose adverse effects to consumers?
  • Is the rule likely to increase litigation and increase costs of retirement services to consumers?

If the department analysis finds a “yes answer” to any of those possibilities, or if it finds the rule is “inconsistent with the priority identified earlier in this memorandum (bold emphasis added by us),” then change will be in order. In those circumstances, the DOL is instructed to propose a new rule “rescinding or revising the rule.”

Wednesday, February 8 – Federal judge in Dallas upholds DOL ruling

On Wednesday, Chief Judge Barbara M.G. Lynn issued a judgment on behalf of the Department of Labor. In an 81-page ruling, she shot down the arguments put forward by nine financial industry trade groups, including the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association, the Financial Services Institute, and the Financial Services Roundtable.

The case was the third failed litigation attempt by financial industry groups to stop or rescind the DOL ruling. Earlier in the day, the Department of Labor had asked Chief Judge Lynn for a stay in the court proceedings, but the judge refused the motion.

This was important because a judgment rescinding or stop-gapping the rule would have changed the timetable for the rule’s rollout, if not its actual application.

Wednesday, February 8 – Hearing for Trump’s Labor pick delayed again

A critical part of the DOL puzzle is Trump’s nominee for Labor secretary, Andrew Puzder. Senate hearings on Puzder have been delayed four times now. In fact, the next hearing date is scheduled for Thursday, February 16, 2017.

News reports attribute the delays to Puzder encountering a number of snags, including difficulty in selling off his holdings in CKE Restaurants, the parent company of Hardee’s and Carl’s Jr. Other potential challenges include stiff opposition from Democratic party-affiliated U.S. Senators and a number of personal issues that could put his confirmation at stake.

With the Department of Labor conducting a new cost-benefit analysis of the rule and potentially offering changes or rescindment, it is a tenuous time for the President not to have his Labor secretary in place.

Update on February 16: At this point, Puzder has withdrawn his nomination due to growing lack of support among Republican party-affiliated U.S. Senators and numerous issues of contention which have arisen during his nomination period.

At this point, Trump has the fewest number of Cabinet members confirmed of anyone in U.S. presidential history.

Thursday, February 9 - DOL Files to Delay Fiduciary Rule

On Thursday, the Department of Labor sent a notice for proposed rulemaking to the Office of Management and Budget in the White House. This notice proposes to delay implementation past the rule's April 10th applicability date. Details of the plan aren't known, but word has been the delay could stretch for 180 days.

Historically, the Office of Management and Budget has taken around 10-14 days to review proposals. If the notice is given approval, as is expected, the Department of Labor will post the proposed rule in the Federal Registery. The publication may take place within the same day of approval.

Why Does All of This Matter?

If the DOL rule does go into effect on April 10, it will elevate financial professionals to new standards of ethical and legal conduct. But even if there are changes – or the rule is abolished – a best-interest standard is critical for protecting consumers. You should expect that your financial professional will offer recommendations in your best interest, depending on your situation, needs, objectives, and other relevant conditions.

At, you can connect with independent financial professionals who practice a best-interest standard. Some of the agents and advisors who affiliate with offer independent, best-interest recommendations with AssessBEST, a powerful guaranteed insurance planning software solution.

You can learn more about AssessBEST and its value in generating independent, objective, best-interest recommendations here.

If you are ready to get started on your goals and create a personalized strategy for you to achieve them, we can help you.

Use our Find a Licensed Advisor section to connect directly with an independent financial professional, and to request a personal strategy session to discuss your needs and goals. And should you have any questions or concerns, call 877.476.9723.


Author: Ian

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