While the Department of Labor (DOL) is asking for a 180 day delay to the implementation of the fiduciary rule just weeks before it was supposed to be implemented, begs the question of whether for many broker-dealers, it’s too late?
Is this like closing the barn doors after the horse has bolted? Prior to the April implementation date, broker-dealers spent millions in legal and compliance fees to abide by the rule. They went through the whole trouble of closing off lines of businesses and told multiple clients that they could no longer service their plan. So how could broker-dealers turn back the clock and pretend that the rule never mattered?
While people will say that this is a 180-day delay, I think the rule is probably kaput for the rest of the Trump administration and that maybe 4 or 8 years. Regardless of whether the delay is only 180 days or 8 years, I don’t see how broker-dealers return to the business of the days before the rule was first announced. When you shelve products and clients, it’s not so easy to go back to business. Don’t be surprised if there are some broker-dealers who decide to abide by the rule even if it’s not into effect because they can’t afford or don’t want to go back to the old way of doing things, only to change again when a new fiduciary rule is eventually implemented.