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The Official End of the DOL Fiduciary Rule

Estimated reading time: 1 minutes, 33 seconds

Since 2016, the investing industry has anticipated a vastly different post-Department of Labor (DOL) Fiduciary Rule world than that which came before. However, and as we’ve reported, the regulations and guidance have been met with confusion, delay and conflict. Recent attempts to save the Fiduciary Rule, in fact, all failed. And last month, the Fifth Circuit Court of Appeals issued the formal mandate vacating the Rule.

So, it’s finally official: The Fiduciary Rule is dead.

Once again the industry is in somewhat of a waiting game, left with a stockpile of unanswered questions. Is all the guidance thrown out, or is some of it salvageable for what’s yet to come? What about all the financial firms and advisors who changed their policies and procedures in order to comply? Will they now revert to previous policies and procedures or modify the new ones? Of those that have since acknowledged a fiduciary role, can they reverse course? Do they return to the guidance in 1975 and other, more recent bulletins and opinions?

And then there’s the Securities and Exchange Commission (SEC) guidance released in April—some eight years after Dodd-Frank directed the SEC to issue such guidance and recommendations. This potential alternative intends to raise and clarify standards of conduct for B-Ds and advisors and provide clarity regarding fees, conflicts of interest and so on.

Kingdom Trust recently outlined six things to know about the proposed SEC guidance. As it stands, major differences exist between the Fiduciary Rule and the SEC’s Advice Rule. And we may yet see coordination between the DOL and SEC on the final version of the guidance.

Now many in the industry must wait with bated breath once again. But since the SEC requested public comments by August 7, a final version could be on the horizon.

How long before we know how this will play out? If recent history is any indication, probably about two years.

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