So many are celebrating the ruling against the Department of Labor’s (DOL’s) fiduciary rule in the Fifth Circuit without realizing what that really means. A Federal appeals court in New Orleans doesn’t have an impact outside the fifth circuit and we’re still likely to hear a Supreme Court case soon since we’ve had the 10th circuit uphold it.
While the Trump led DOL seems very intent on dismantling the rule one way or the other, help is on the way. The Securities & Exchange Commission seems intent on finalizing their own fiduciary rule, which may lead the DOL to amend the rule to have one consistent fiduciary rule out there. In addition, despite the claims of the Chamber of Commerce that the rule will increase the cost of advisory services, I believe that the marketplace is going to increasingly want retirement plan advisors who serve in a fiduciary capacity. After all the cost and time sent on trying to comply with the rule, brokers can’t try to reverse time and tell their clients that they have no interest in serving in a fiduciary capacity. The ship has sailed and I think that even if the DOL or the Courts filet this rule like a butcher would, another, a stronger fiduciary rule is going to come down the road.
So while the fiduciary rule may be a little sleepy, it’s still got some life to it.