Practice Management

What Comes Next with DOL Conflict of Interest Standard

Experts in several discussions this week suggested organic market factors could take the place of DOL rulemaking that under the Obama Administration sought to raise the conflict of interest standards for advice. 

By John Manganaro | January 26, 2017
Page 1 of 2

Brad Campbell, Washington-based counsel with Drinker Biddle and Reath, has been in frequent contact with the Trump Administration in recent weeks; he believes the Department of Labor (DOL) rulemaking will almost certainly be halted before April, but having a Plan B is a good idea for prudent advisers, he says.

Campbell laid out his expectations during an “Inside the Beltway” call-in event presented by Natixis Global Asset Management. Matching the bulk of industry commentary shared so far with PLANADVISER, Campbell said he strongly expects the implementation of the fiduciary rule will be halted, or at least significantly dialed back, by the Trump Administration.

“We all probably already know about the memo that has come out seeking to freeze and potentially pull back all ongoing regulatory projects,” Campbell observed, “but I agree with the notion that the DOL fiduciary rule is not really going to be impacted by that memo. While its applicability dates are forthcoming, it is already a properly implemented regulation, and so it is not something that can be just whisked away with the stroke of a pen.”

Campbell noted that the Trump Administration will very likely (and likely very soon) issue a separate order specifically pertaining to the DOL rulemaking, adding “this is likely to occur in the very near future … such an announcement could come any day this week or next.”

“At a gut level, what are the chances of delay and repeal, or delay and modify?” Campbell was asked by his colleague and principal at Drinker Biddle and Reath, Fred Reish.

“It sounds like right now there is more interest in the administration at looking at a repeal approach,” Campbell responded. “But we should also keep in mind that none of the people who would lead this effort within the administration have been confirmed yet. Only the Labor Secretary has been formally nominated—many other relevant positions yet to be filled who will have to play a role. But at a minimum we expect it will be modified substantially. We will soon know who the personnel are who are making this decision.”

NEXT: Acting amid the uncertainty