The White House has just released a copy of the executive order that President Donald Trump signed earlier Friday on the fiduciary rule.
The fiduciary rule, which the Department of Labour passed last year, intended to prevent financial advisers from giving conflicted advice to retirement savers. The rule had been set to go into effect this April.
The executive order gives power to the Secretary of Labour to rescind or revise the rule.
In the executive order, Trump writes that the fiduciary rule “may significantly alter the manner in which Americans can receive financial advice, and may not be consistent with the policies of my Administration.”
Trump’s order directs the Secretary of Labour to “prepare an updated economic and legal analysis” of three areas:
whether the rule, anticipated to be implemented in April, has “harmed or is likely to harm investors due to a reduction of Americans’ access to certain retirement savings offerings, retirement product structures, retirement savings information, or related financial advice;”
whether the rule has disrupted the retirement advice industry “that may adversely affect investors or retirees”
and whether the rule is ” likely to cause an increase in litigation, and an increase in the prices that investors and retirees must pay to gain access to retirement services.”
If any of those three points are met, or if the rule is found to hurt Americans’ ability to gain access to retirement information and financial advice, the Secretary of Labour must rescind or revise the rule, according to the order.
You can read the full text of the executive order below.
THE WHITE HOUSE
Office of the Press Secretary
FOR IMMEDIATE RELEASE
February 3, 2017
February 3, 2017
MEMORANDUM FOR THE SECRETARY OF LABOUR
SUBJECT: Fiduciary Duty Rule
One of the priorities of my Administration is to empower Americans to make their own financial decisions, to facilitate their ability to save for retirement and build the individual wealth necessary to afford typical lifetime expenses, such as buying a home and paying for college, and to withstand unexpected financial emergencies.
The Department of Labour’s (Department) final rule entitled, Definition of the Term “Fiduciary”; Conflict of Interest Rule ‑‑ Retirement Investment Advice, 81Fed. Reg. 20946 (April 8, 2016) (Fiduciary Duty Rule or Rule), may significantly alter the manner in which Americans can receive financial advice, and may not be consistent with the policies of my Administration.
Accordingly, by the authority vested in me as President by the Constitution and the laws of the United States of America, I hereby direct the following:
Section 1. Department of Labour Review of Fiduciary Duty Rule. (a) You are directed to examine the Fiduciary Duty Rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice. As part of this examination, you shall prepare an updated economic and legal analysis concerning the likely impact of the Fiduciary Duty Rule, which shall consider, among other things, the following:
(i) Whether the anticipated applicability of the Fiduciary Duty Rule has harmed or is likely to harm investors due to a reduction of Americans’ access to certain retirement savings offerings, retirement product structures, retirement savings information, or related financial advice;
(ii) Whether the anticipated applicability of the Fiduciary Duty Rule has resulted in dislocations or disruptions within the retirement services industry that may adversely affect investors or retirees; and
(iii) Whether the Fiduciary Duty Rule is likely to cause an increase in litigation, and an increase in the prices that investors and retirees must pay to gain access to retirement services.
(b) If you make an affirmative determination as to any of the considerations identified in subsection (a) ‑‑ or if you conclude for any other reason after appropriate review that the Fiduciary Duty Rule is inconsistent with the priority identified earlier in this memorandum ‑‑ then you shall publish for notice and comment a proposed rule rescinding or revising the Rule, as appropriate and as consistent with law.
Sec. 2. General Provisions. (a) Nothing in this memorandum shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(d) You are hereby authorised and directed to publish this memorandum in the Federal Register.
DONALD J. TRUMP