Washington (Reuters) – The U.S. Labor Department has taken a first step toward possible derailment or dilution of its controversial rule on retirement advice as it begins to re-examine it at the directive of President Donald Trump, according to a notice made public on Wednesday.
The department proposed a 60-day delay of the fiduciary rule, which requires retirement advisers to put the interests of clients ahead of their own. It was slated to take effect on April 10, but Trump asked the department to review the rule one more time for its impact on investors.
Industry analysts and consumer groups agreed it could be the first of multiple delays as the department begins a comprehensive review of the Obama-era regulation, after Trump in February issued an executive order directing the department to review the rule.
‘String Of Delays’ Possible
"A 60-day delay is relatively short to undertake the type of economic and legal analysis that they're contemplating, which suggests to me that this isn't just going to be a 60-day delay, It's likely going to be a string of delays," said Micah Hauptman, with the Consumer Federation of America.
The proposed delay should have a "calming" effect on the marketplace, which had been "hanging in limbo" ahead of the April 10 effective date, said Denise Valentine, a senior analyst with Aite Group, which advises the financial services industry on regulatory issues.
"All along we've kind of known that the rule is very likely to be amended. I don’t think it will be killed," Valentine said.
The public will have 15 days from the publication of the proposed delay in the Federal Register on Thursday to comment on the delay itself before the Labor Department can formalize it. There will also be a 45-day window to submit comments or information related to other aspects of Trump's memorandum.