Library

With Donald Trump named president-elect, a myriad of current policies have been put into question - including the Department of Labor’s Fiduciary Rule. While this rule is not set to take effect until April 2017, there is question as to whether Trump’s election could halt its implementation.

There have been a number of headlines suggesting that Donald Trump will put the DOL’s Fiduciary Rule in limbo. His campaign advisors suggest they seek to repeal it, although the President-elect has yet to address the rule specifically. The Trump Administration has a variety of options for handling the rule:

• Delay implementation with an Executive Order. While quickly accomplished with an emergency order, a delay could create more or prolonged uncertainty.
• Prevent enforcement by defunding. Attaching a rider to the appropriations bill as part of the budget process would keep the rule intact, but essentially limit the rule’s impact by making it unenforceable.
• Replace or repeal with Congressional action. Final regulatory rules are not easily repealed as it requires Congressional action. New legislation is possible, considering the Republican majority in the House and Senate, but it would face opposition.
• Although much of the rhetoric has shown a stance against the rule, the incoming administration does have the option to let the rule and its implications move forward as is.

Given that Trump does not take office until late January, the new Administration has a narrow window of time to make meaningful changes to the rule. With the timeline, the ambiguity of Trump’s position during the campaign trail, and the industry disruption already caused by the rule, financial institutions face great uncertainty. While some in the industry could be considering the delay of any changes to follow suit with the new rule, most believe it is in advisors’ best interest to move forward as if the rule is set to be final.

Manning & Napier continues to monitor this changing landscape closely and the implications it may carry. To stay up to date on the current fiduciary environment, visit www.manning-napier.com/EvolutionaryFiduciary.