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Firms Slow Early Efforts to Comply with Fiduciary Rule; Comments on Proposed Delay Flood in to DOL

Financial firms are curtailing their early efforts to comply for the DOL Fiduciary Rule, set to become effective April 10, as the rule faces a possible regulatory delay. The Wall Street Journal reported that at least two companies will no longer launch new share classes meant to avoid pay incentives that could cause brokers to violate the Fiduciary Rule. The report stated that fund firms that have already sought regulatory approval to offer “T shares” may not withdraw their requests but “wait and see how the review plays out before deciding whether to proceed with the T shares’ development.” The DOL is currently accepting comments on its proposal to delay the rule for 60 days. Early comments have been a mix of views, with firms like Neuberger Berman writing in support of a delay “to ensure that we and our products are ready for the new rule.” Betterment, LLC, a registered adviser which offers digital investment advice, wrote in overall support of the Fiduciary Rule and against any delay, stating that it would be “worse if the delay is used as an opportunity to dilute the rule or remove it altogether.” 

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