CHICAGO - Should advisers wait until the presidential election to begin implementing the new fiduciary rule?
Yes, says Brian Hamburger, president and CEO of MarketCounsel, the Englewood, N.J.-based compliance and consulting firm. Speaking at the annual Envestnet Advisor Summit, Hamburger said that it should take fee-based investment advisers about “30 to 60 days of work,” including reviewing contracts and staff training to comply with the rule.
He went on to note that while advisers have until April 2017 to comply with the DoL rule, enforcement, or “effective mandatory compliance” won’t begin until 2018.
In the meantime, “the election could be disruptive to this rule,” Hamburger predicted, possibly resulting in the rule “going away all together.”
“There are no prizes for being first [to comply],” he told advisers attending the conference session on the DoL fiduciary rule.
‘HIGH RISK STRATEGY’
Clarke Camper, the Washington-based senior vice president of government affairs for Capital Group’s American Funds, disagreed.
Waiting until the election to begin taking compliance action could be a “high risk strategy” Camper warned advisers.
If a Democrat is elected President, there will be no change in the DoL rule, he said.
Moreover, even if a Republican wins, it's unlikely the DoL rule would be high on the list of actions by the Obama administration the GOP would want to roll back, he added. Indeed, because the fiduciary rule controversy has been framed as a Wall Street versus a Main Street battle, with passage of the rule characterized as a victory for Main Street, financial advisers should “not count on a new president changing the rule in any significant way,” Camper said.
