The Department of Labor is expected to release the finalized version of its long-anticipated fiduciary rule on Wednesday, April 6, according to published reports.
While no one is certain of what the new rule will look like, it’s expected to require advisors overseeing retirement plans to act under a fiduciary standard, putting client interests ahead of all other considerations when making investment recommendations on accounts covered under the Employee Retirement Income Security Act.
The Wall Street Journal reports that the regulation is expected to come out at 11:30 a.m. on Wednesday, with supporters like Senator Elizabeth Warren (D, Mass.) and Labor Secretary Thomas Perez making the announcement at Center for American Progress in Washington, D.C., a think tank on progressive public policy research and advocacy.
The rule proposal was released last April, giving industry groups much time to examine it closely and submit comments. In late January, the DOL sent the rule to the Office of Management and Budget for final review.
Investor advocate groups like the Consumer Federation of America have long argued that commissions earned by brokers—who are not legally obligated to act as fiduciaries—incentivize transactions that hurt consumers, like advising clients to roll 401(k)s into IRAs with higher fees and excessive trading.
Meanwhile, industry groups have long argued that the proposal could limit the public’s access to quality financial advice, contending that the rule would make it too costly to serve smaller clients.