Supporters of the Department of Labor's fiduciary rule are questioning whether the agency actually read the more than 1,000 comment letters it received on delaying the measure before it took a major step to do so earlier this week.
The comment period on the delay, which would push back the implementation date of the fiduciary regulation from April 10 to June 9, ended on March 17. The agency forwarded the final delay rule to the Office of Management and Budget on March 28. OMB must approve the delay.
The DOL is seeking the delay in order to conduct the review of the rule called for by President Donald Trump in a Feb. 3 memo. Mr. Trump told the agency to modify or repeal the regulation if it was found to curb access to financial advice for some investors and raise litigation risk for firms.
The agency opened a comment period on the delay itself to stay within rulemaking parameters. But advocates for the rule, which would require financial advisers to act in the best interests of their clients in retirement accounts, say that the Trump DOL is moving too quickly.
"We are meeting with OMB on Monday to express our concern about whether the department had adequate time to fully consider the 1,105 substantive comments that have been filed," said Maureen Thompson, vice president for public policy at the Certified Financial Planner Board of Standards Inc. Ms. Thompson and other members of the Financial Planning Coalition are scheduled to talk to OMB officials.
A DOL spokesman declined to comment.
The fiduciary rule was finalized during the Obama administration, which said it was needed to protect workers and retirees from conflicted advice that leads to sales of inappropriate high-fee investments that erode savings. Financial industry opponents assert that the rule is too complex and costly and will price investors with modest assets out of the advice market — arguments that have been repeated by Trump administration officials.
The pace at which the new administration is trying to undo the work of its predecessor is causing tension.
"This is a sloppy and rushed process, and it sends the signal that the outcome has been pre-determined," said Barbara Roper, director of investor protection at the Consumer Federation of America. "It legally can't be rushed."
But an industry representative said that what was rushed was the original April 10 deadline for initial implementation of the rule, which falls a little more than one year after the final rule was released last April.
"It's too much, too fast to overhaul an entire industry in one year's time," said Jill Hoffman, vice president of government affairs for the Financial Services Roundtable. "Proponents of the rule have no appreciation for that."
As the DOL begins its re-assessment of the rule, Mr. Trump's nominee for DOL secretary, Alexander Acosta, took another step toward confirmation when the Senate Health Education Labor and Pensions Committee approved his nomination on Thursday. It's not clear when it will go to the Senate floor for a vote.
The next milestone in the process of reviewing the DOL fiduciary rule will occur on April 17, the deadline for comment letters on the areas outlined in Mr. Trump's memo. That will offer fiduciary advocates another chance to try to convince the agency to preserve the rule.
"We have some hope," Ms. Thompson said. "Mr. Trump campaigned on a platform to stand up for middle-class people. Is it a done deal? We would like to think not."