A controversial rule that requires financial advisors to work in the best interests of their clients will go into effect next month as scheduled, Labor Secretary Alexander Acosta said.
Despite efforts to delay it further, the so-called fiduciary rule will get put in place June 9, Acosta wrote in an op-ed for the Wall Street Journal. However, analysts believe there will be more changes to come before full implementation takes effect.
The rule has come under criticism for limiting investor choice and likely increasing costs for the financial advisory industry. The administration already delayed the rule once past its original April 10 implementation date, but apparently has decided to go ahead with the first steps.
“We have carefully considered the record in this case, and the requirements of the Administrative Procedure Act, and have found no principled legal basis to change the June 9 date while we seek public input,” Acosta wrote. “Respect for the rule of law leads us to the conclusion that this date cannot be postponed.”
Advocates for the rule believe it will help retirees by eliminating hidden costs and provide more disclosure. However, advisory heavyweights like BlackRock and Vanguard have warned of unintended consequences. BlackRock recently called for a 12-month delay in implementation until the rule is better crafted.