The Labor Department cleared a landmark retirement-savings rule to take effect next month, ending a stretch of uncertainty for brokers and investors after President Donald Trump called for a review of the Obama-era regulation with an eye toward repeal or revision.

The so-called fiduciary rule—which aims to eliminate conflicts in financial advice and ensure that brokers put the interests of retirement savers first—was originally due to come online in April but was delayed for 60 days as part of the review. Labor Department Secretary Alexander Acosta surprised many across the brokerage and insurance industries by recommending, in a Wall Street Journal opinion piece late Monday, against a further delay in the rule.

While Mr. Acosta preserved the possibility of revision or repeal of the rule as the Labor Department continues its economic review, the decision to let the regulation come into effect June 9 effectively makes it harder to reverse later. This is because firms across the country have to communicate compliance changes to clients, including disclosures about how clients are charged and commitments to put customers’ interests first.

The so-called fiduciary rule, six years in the making and unveiled by the Labor Department last spring, holds brokers and advisers who work with tax-advantaged retirement savings to a fiduciary standard as opposed to the previous suitability standard. That means they must work in the best interest of their clients and generally avoid conflicts, which can come about with the commission-based compensation common among brokers and insurance agents.

Source:  Wall Street Journal