The Labor Department has proposed delaying a rule that would require retirement advisers to act in the best interest of their clients.
The so-called “fiduciary rule” was set to go into effect on April 10 and would have prohibited retirement advisers from accepting incentives for promoting certain funds over others. Advisers don’t always have to disclose the incentives to clients, which can lead to conflicts of interest.
President Donald Trump issued a memorandum in early February for the Labor Department to examine the rule to determine whether it will hinder access to retirement and financial advice. On Wednesday, the department announced a proposed 60-day extension for the rule to go into effect on June 9.
During that time, the department said it will collect applicable information on the possible effects of rule, including public comments.
The Labor Department is currently running without a leader.
Trump’s initial Labor Secretary pick Andrew Puzder, who is the CEO of CKE Restaurants, withdrew his nomination last month. The president has since named Alexander Acosta to run the department.
The fiduciary rule was created under the Obama administration last year. Americans have become increasingly responsible for saving for their own retirement as pensions go the way of the dinosaur for many workers, and more people rely on retirement advisers to help guide their savings.
Proponents of the rule claim it’s necessary to protect investors from abusive practices.
Opponents argue it would make retirement advice more expensive and hurt savers.
“The [department’s] rule will lead to fewer retirement savings choices for many Americans and we are encouraged the DoL is proposing to delay this rule,” the Financial Services Roundtable, a Wall Street lobbying group, said in a statement Wednesday.
