The long-awaited regulation that aims to protect your retirement savings and require your financial advisor to
The Department of Labor had delayed the original April 10 start date by 60 days after President Donald Trump issued a presidential memorandum in February, calling on the agency to review the regulation and prepare an updated economic and legal analysis.
"When investors receive retirement investment advice, they will receive pretty significant protections and the advice will be in their best interests," said Micah Hauptman, financial services counsel at the Consumer Federation of America.
The rule covers 401(k) plans and individual retirement accounts (IRAs). Here's what you can expect starting this month. You can also consult the DOL's list of frequently asked questions for additional help.
Starting June 9, your financial advisor and his or her firm will need to comply with the "impartial conduct standard."
This requires financial advisors to charge no more than reasonable compensation, avoid misleading statements and, perhaps most importantly, provide advice that's in the best interest of the investor.
Additional requirements will take effect on Jan. 1, 2018. These provisions
At the heart of the battle over the rule, which was hotly contested by the financial services industry, is $7.85 trillion in IRA assets. These accounts are moneymakers for firms as clients often roll their savings out of 401(k) plans when they retire or change jobs.
Meanwhile, the Labor Department is still reviewing the "fiduciary rule," per Trump's presidential memorandum.
In the DOL's list of frequently asked questions, the department said it would seek additional public input regarding ideas for possible new exemptions or regulatory changes based on recent comments.
The DOL will ask the public whether an additional delay of the Jan. 1 portion would "allow for more effective retirement investor assistance" and help firms avoid additional expenses that may clash with how Labor ultimately proceeds.
Organizations representing financial services firms have pushed for more delay.
"While we are disappointed that the Department of Labor has chosen not to further delay the rule until the Department has completed a review of the entire rule's impact on investors, we appreciate Secretary [Alexander] Acosta's recognition of the rule's negative impact and his desire to seek public input," said Kenneth E. Bentsen, president and CEO of the Securities Industry and Financial Markets Association, in a statement.
Nevertheless, many firms have already adopted changes to help mitigate conflicts of interest, including the use of mutual fund "clean shares,"