It’s morning in America, but the financial industry may have to wait many sunrises before the regulatory impact of Tuesday’s general election can be fully understood.
As Republicans, led by presidential-elect Donald Trump, cheer their victory on Wednesday, foes of the Department of Labor’s fiduciary rule also appear emboldened.
Dale Brown, president and CEO of the Financial Services Institute, an advocacy and lobbying organization staunchly opposed to the DOL’s rulemaking, congratulated Trump on his election.
“We stand ready to work with his administration in ensuring Main Street Americans have access to objective and affordable financial advice as they save for a dignified retirement, pay for their children’s education and help care for aging parents,” Brown said in a statement released early Wednesday morning. “We also congratulate all who won election to Congress and renew our commitment to work constructively with both sides of the aisle to find common ground, end gridlock and do what’s right for Americans who want to save and invest for their future.”
Indeed, Trump and congressional Republicans will form a government more hostile to regulation and interventionism than the Obama administration.
However, supporters of the DOL rule say that eliminating the fiduciary rule and the legislation it is based upon is easier said than done.
Knut Rostad, the president of the Institute for the Fiduciary Standard, a fiduciary advocacy group, says that Trumps politics don’t necessarily indicate that he will seek the rule’s repeal.
“Trump, by a review of his statements and policy positions, is part libertarian, Tea-party conservative and economic and cultural liberal,” Rostad said in an emailed statement. “He is no party loyalist. His instinct, as the world has witnessed, is more to challenge the Republican party than to go along with it. So, why it should be assumed that Trump will sign off on any or all GOP measures to remove financial regulations?”
The rule, which went into effect in June of this year and is slated for enforcement starting in April of 2017, will greatly constrain the types of recommendations and investment choices that advisors can make within clients’ retirement accounts.
Trump’s libertarian stances are strongly critical of regulation, says Joe Duran, CEO of United Capital Financial Advisors, but that doesn’t mean that his sights will be turned on the DOL’s fiduciary rule ahead of its enforcement.