The End of the DOL Fiduciary Rule

by Mallory O'Sullivan | Jun 04, 2018
The End of the DOL Fiduciary Rule If you have any kind of footing in the financial services industry, then you probably know that the Department of Labor’s fiduciary rule has been a hot topic for quite a while. You are also likely aware that a recent ruling by the 5th Circuit Court of Appeals struck down the rule and vacated its provisions.  Attempts were made to revive the litigation, but in May, 2018, the Court denied motions by three states to defend the law. This all but puts an end to the force and effect of the rule.

The Department of Labor (DOL) fiduciary rule was created under the Obama administration and scheduled to take full effect by January 1, 2018. The rule greatly expanded the definition of retirement plan investment advice that would trigger fiduciary duties under ERISA and require retirement plan advisors to put their clients’ best interest first. The original effective date was pushed back to July 1, 2019. However, on March 15, 2018, the 5th Circuit Court of Appeals determined that the DOL acted “unreasonably” and “arbitrarily” when it set forth the rule, and vacated the rule in its entirety.

Even though the DOL has until June 13 to appeal to the Supreme Court, this action does not seem likely.  The rule remains under review by the Department, as directed by President Trump, and a new version may emerge in the future. Meanwhile, the Securities and Exchange Commission (SEC) has proposed a rule package that includes a best interest standard for broker/dealers, and the National Association of Insurance Commissioners (NAIC) is also looking at adding a best interest standard to its annuity suitability model regulation.

WebCE will continue to monitor the state of the DOL fiduciary rule and update our online insurance continuing education courses accordingly. As your trusted source for insurance industry news, we are committed to keeping you up-to-date with hot topics. Visit www.WebCE.com to view our complete online insurance CE catalog or call 877-488-9308 to speak to a member of our support services team.


Additional Resources:

http://www.investmentnews.com/article/20180321/FREE/180329988/what-to-watch-for-next-with-the-dol-fiduciary-rule

https://www.investopedia.com/updates/dol-fiduciary-rule/

http://www.investmentnews.com/article/20180522/FREE/180529985/5th-circuit-denies-states-second-attempt-to-defend-dol-fiduciary-rule