The Labor Department’s fiduciary rule has been vacated in a 70-page order by the 5th U.S. Circuit Court of Appeals.
The judges wrote in their decision Thursday that the stated purpose of the Labor Department’s rule “is to regulate in an entirely new way hundreds of thousands of financial service providers and insurance companies in the trillion-dollar markets for ERISA plans and individual retirement accounts.”
President Trump signed a memorandum to roll back the rule in February 2017, telling the DOL to review the rule and to delay its April 10 implementation. The rule would have protected retirement savers who lose $17 billion a year to conflicts of interest, according to President Obama and the Labor Department when they announced the change in 2016. Critics argued that it would restrict the products available to investors and would leave holders of smaller accounts in need of a manager.
The Department of Justice said in June that it would not challenge the U.S. Court of Appeals’ decision, further signaling the rule’s demise.
The mandate “puts the DOL fiduciary rule to rest once and for all,” Kevin Mayeux, CEO for the National Association of Insurance and Financial Advisors, said in a statement. “Advisors can now confidently move forward, helping their clients prepare for retirement without the shadow of the rule looming over them.”
We’ll watch for more developments and share updates on additional fiduciary rule changes. In the meantime, if you have questions about retirement accounts, contact a KraftCPAs representative. We’ll be glad to assist you.