Final Trump memo lacks explicit directive to delay DOL fiduciary rule

The final version of a memo sent by President Donald Trump on Friday to the Department of Labor directs the agency to review a sweeping investment-advice rule but does not contain an explicit delay of the April 10 implementation date.
A copy of the final version obtained by InvestmentNews shows two key parts of a draft memo that was circulating in Washington were excised from the document Mr. Trump signed around 1 p.m. in the White House.
First, the final version does not direct the DOL to delay the rule for six months. Second, it does not tell the agency to consult with the Department of Justice to seek a stay of the litigation surrounding the rule.
The memo instructs the DOL to “prepare an updated economic and legal analysis” to determine whether the rule is likely to harm investors, disrupt the industry, or cause an increase in litigation and the price of advice.
The memo said that if the DOL concludes the regulation does hurt investors or firms, it can propose a rule “rescinding or revising” the regulation.
Although the memo does not order a delay, the review could result in one and then lead to repeal of the rule, according to an industry representative.
“It is clear they want to scuttle this thing and make it right,” said Jill Hoffman, vice president for investment management at the Financial Services Roundtable. “We consider this a win and we’ll work out the other details. We have clear signals there will be changes to the rule.”
A formal delay and a stay in the litigation could come in a separate action by the agency.
“The Department of Labor will now consider its legal options to delay the applicability date as we comply with the president’s memorandum,” Acting DOL Secretary Ed Hugler said in a statement.
The rule requires financial advisers to act in the best interests of their clients in retirement accounts.
Financial industry critics assert it is too complex and costly and would significantly increase the cost of giving and receiving advice. Proponents say it would protect investors from conflicted advice that leads to inappropriate high-fee products that erode savings.
Advocates remain wary of Mr. Trump’s directive. But for now, the April 10 initial implementation date remains in place.
“If they do a fair review that looks at the factors that the DOL is supposed to review, the rule is safe,” said Barbara Roper, director of investor protection at the Consumer Federation of America.
But it’s unclear when the DOL will have new leadership. The Senate hearing for Mr. Trump’s nominee for secretary, Andrew Puzder, has been delayed several times and has not yet been rescheduled.
“They face a significant challenge in conducting a thorough review with no one at the helm,” Ms. Roper said.