In the ten days since Donald J. Trump became the president-elect, we have heard hopeful speculation in boardrooms and in the media that the new administration will throw out the Department of Labor’s Fiduciary Rule for qualified retirement accounts, set to go into effect on April 10, saving our industry from adapting to perhaps the largest regulatory change it has ever faced.
But the executives who run the investment services businesses in banks and credit unions aren’t buying the hype.
A mere 3% of bank and credit union executives that participated in Kehrer Bielan’s DoL Readiness Survey, conducted this week, say they think that the incoming administration will repeal the Rule. The other 97% think that the Rule, in some form or another, will eventually go into effect. They are evenly split between thinking the Rule will be delayed (28%), modified (34%), or left unchanged (34%).
Their product partners, on the other hand, are holding out more hope that the new administration will intervene. Twenty-seven percent of product and service provider respondents say they think that the Rule will be repealed, while only 9% think it will remain unchanged.
Too few executives from third-party broker dealers participated in the DoL Readiness Survey to constitute a representative sample, but comments from two of the largest TPMs seem to indicate that they are betting on the rule going into effect.
“We are staying the course to be prepared for April 2017 and fully implemented for January 2018,” commented one of the executives.
An executive from another TPM went even further; “Many of the product changes (product standardization), platform changes (lowered minimums and reduced advisory platform costs), and creating new solutions to move business on platform (direct business to custody business) will continue with a repealed or modified rule at our firm.”
Seventy-seven bank, credit union, third party broker dealer, and product partner executives participated in the Kehrer Bielan DoL Readiness Survey, an online survey conducted on Tuesday and Wednesday of this week. Look for additional findings from the survey in future Highlighters.