We are writing to update you on the status of the Department of Labor’s final fiduciary rule (Final Rule). Currently, the Final Rule is scheduled to become applicable on April 10, 2017, with additional requirements effective January 1, 2018.

Last Friday President Trump issued a presidential memorandum regarding the Final Rule, noting that the rule “may significantly alter the manner in which Americans can receive financial advice, and may not be consistent with the policies of my Administration.” Accordingly, the president directed the Department of Labor to examine the Final Rule to determine if it would adversely affect the ability of Americans to gain access to relevant information and advice. Specifically, the president directed the department to examine the impact of the Final Rule, including whether it is likely to reduce access to retirement savings offerings and information, result in industry disruptions, or increase litigation and cost. Finally, the president directed that if the department makes an affirmative determination on any of these issues, the department is to publish for notice and comment a proposed rule rescinding or revising the Final Rule.

Contrary to earlier reports in a variety of news outlets, the presidential memorandum did not delay the applicability date of the Final Rule. While it is widely expected that the Department of Labor will delay the application of the Final Rule on the basis of ongoing litigation, no delay has been formally announced.

Based on the foregoing, it is unclear how advisers, brokers and other financial intermediaries will respond. It is possible that pending initiatives such as the adoption of level fee arrangements, the use of newly registered share classes or changes in revenue sharing arrangements may be delayed or abandoned. We anticipate receiving additional guidance in the coming days and weeks and will update you as we learn more.