US Labor Department proposes delaying new rule for financial advisers

Reuters News
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Posted: Mar 01, 2017 10:06 AM

WASHINGTON (Reuters) - The U.S. Labor Department is seeking to delay its controversial Obama-era fiduciary rule on financial advice as it solicits public comment on the matter, according to a notice made public online on Wednesday.

The department, in a document to be published in the Federal Register on Thursday, proposed a 60-day delay for the rule that requires retirement advisers to put the interests of clients ahead of their own.

Currently the rule is slated to go into effect April 10.

Republican President Donald Trump earlier this month ordered the department to review the rule, which many experts interpreted as an effort to delay or kill the regulation.

The move drew fire from Democrats and other critics who said it showed the White House was aligned with Wall Street, not middle-income Americans.

Industry critics have said the rule limits the ability of advisers to service clients who cannot afford to pay for financial advice and must use products that carry commissions or other indirect costs.

The U.S. Chamber of Commerce, which has sued to kill the rule, on Wednesday praised the proposed delay, saying it would "help ensure all Americans have access to the advice and choices needed when saving for their future."

Trump's Democratic predecessor, Barack Obama, had finalized the rule last year and said it would help protect financial consumers.

(Reporting by Susan Heavey; Editing by Linda Stern and Jeffrey Benkoe)