Many lawmakers have come forward in recent days urging the Trump administration to kill the Department of Labor's new fiduciary rule.
The rule gives financial advisors a "fiduciary responsibility to their clients." That means beginning in April 2017, when the regulation goes into effect, advisors will be legally required to invest money in their clients' best interest, instead of investing in ways that give them the best commission.
One such DOL standard critic, Rep. Mark Meadows (R-NC), head of the House Freedom Caucus, released a report on Dec. 16 highlighting how the regulation would likely impact low- to middle-income retirees the most... and not in a good way...
Must Read: How a 26(f) Program Can Save Your Retirement
Meadows argued that the rule will hamper saving for retirement within these fiscally strapped households based on the fact that small brokerage firms will find themselves required to comply with the regulation. These firms, Meadows asserted, will be forced to increase the minimum investible assets a client must have to do business with them, assets that low- to middle-income earners just don't have.
Another fiduciary rule critic emerged after Meadows this past Monday (Dec. 19): the head of the U.S. Chamber of Commerce, Thomas Donohue.
"A significant portion of the industry is continuing to rely on the rule being stopped," Donohue said on Monday, according to ThinkAdvisor. "But if stopping the rule is a priority for the [Trump] administration, then they are going to have to signal that soon."
For his part, however, Trump has remained suspiciously mum on the DOL rule's fate.
Which has led some experts to believe that he might not scrap the controversial regulation at all...
Experts: DOL Fiduciary Rule Is Not Trump's No. 1 Priority
While Trump's campaign strategists have said he will repeal the new fiduciary rule, several industry experts have come forward to negate these assertions.
You see, in order to take the regulation completely off the books, Trump's admin would have to propose a new rule to take its place before going through the full regulatory gamut that comes with such legislative substitution. This process involves putting the measure out for comment, modifying, and then finalizing it - which ultimately means it would take a lot of time.
Time that Trump may not have, according to one financial law expert recently...
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"This rule is becoming effective within 80 days of when Trump becomes president," Marcia Wagner, a lawyer with the Wagner Law Group, told CNBC on Nov. 9. "I would find it really hard to believe that he's going to spend any of his capital on the conflict-of-interest rule in his first 100 days."
Trump could, however, delay the April 10, 2017, implementation date, said Cary Coglianese, director of the University of Pennsylvania Law School's Program on Regulation, this past Monday. "If you are just amending the compliance date, that is trivial from the standpoint of the law and what an agency has to do to withstand judicial scrutiny," Coglianese argued.
But even a postponement is unlikely to happen before the rule becomes effective...
That's simply because the real estate mogul has bigger fish he's promised to fry the moment he assumes office - repealing Obamacare, for example, and imposing tariffs on China.
And even if the Trump administration did decide to try and delay the rule, there's no abandoning the compliance efforts currently underway. And recent federal appeals court rulings are the proof of that point...
Just last week on Dec. 16, the DOL scored its third victory at the federal level when a federal appeals court denied a request for an injunction on the rule from an insurance industry group.
So it seems in spite of the legislative backlash against the fiduciary rule's enactment, the judicial system just might have the ultimate power to see it through to its April institution date - regardless of an eventual intervention by Trump.
While we keep you updated on the future of the DOL fiduciary rule and how it will directly affect you on down the line - we also want to share with you a can't-miss opportunity that all retirees and anyone nearing retirement will want to review closely before April 2017.
You see, millions of current and future retirees could become the victims of a nationwide blackout that's been orchestrated by the federal government. Caught in the crosshairs is a unique class of investments that provide the opportunity to earn aggressive monthly income combined with huge lump-sum payouts.
Here's more on how to enroll now. Because this fast-approaching "retirement blackout" may cause you to miss out on $68,870 - or more - a year. Read about it here...