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Is the DoL really DoA?


Is the DoL really DoA?

The “Wait and See” approach might work, provided it’s for the right reasons.

“Now that the ‘DoL Rule is DoA’ we’re waiting to see if our firm will walk back the restrictions and rules they enacted as a result of the ruling.”

The truth is that the DoL Rule isn’t dead yet, as a higher court could still appeal the 5th Circuit Court of Appeals’ decision to stay the ruling. Although the Rule as we know it is likely to cease to exist at some point in the future, we fully expect that a new standard will emerge, possibly from the SEC, to hold all to a common Fiduciary doctrine.

Related: DOL Fiduciary Rule Derailed? So What?

So what will become of the restrictions and added bureaucracy that firms enacted as a result of the promulgated Rule? Will firms – especially those like Merrill Lynch that took a particularly aggressive stance in their interpretation – wave a magic wand to reverse their decisions and make the added restrictions disappear? Likely not. Until a final decision is made on the Rule’s status, no firm is going to dismantle what’s been put in place. From a PR perspective, it’s hard to retreat from the pro-client posturing they established in the process—not to mention the time, money and effort involved. Could they pull back in the future? Of course it’s certainly possible, but not in the near-term.

Related: Do the Economics of a Move to Independence Really Add Up?

Regardless, if you believe that your firm will relax or do away with any or all of the DoL-related restrictions – and that doing so would result in you being truly satisfied with the new status quo – then you should, of course, wait and see.

If, however, there are other things about your firm that are preventing you from acting in what you believe to be the best interests of your clients – especially at a time when there are so many other opportunities that can allow you to do so – then sitting tight may not be the best plan.

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