The Department of Labor officially postponed the fiduciary rule, an Obama-era regulation that would give new protections to investors working with financial advisors. The rule was set to go into effect next week, but is now slated for June 9.
The Labor Department moved to delay the rule for two months, at the direct behest of President Donald Trump. President Trump signed a memorandum earlier this year in which he publicly came out against the rule and directed the Labor Department to review the impact of the regulation.
This setback comes at a time when the rule has a lot of support. Since the Labor Department proposed the delay a month ago and asked the public for comments, more than 178,000 letters poured into the Labor Department in support of the regulation, compared to just 15,000 letters in opposition. It required all financial advisors—including brokers with major firms like Merrill Lynch, Morgan Stanley and Wells Fargo—to act as fiduciaries, or in other words, in their clients’ best interest when advising people on their retirement savings.
This delay impacts investors, including people weighing what to do with their 401(k)s at retirement, so MONEY breaks down below three things you need to know.
1. This is a Multi-Step Process
The recent delay means that financial companies get two months to gear up for the implementation of the first portion of this rule. The so-called fiduciary rule is attempting to change the fact that for many years, brokers have been allowed to put clients into expensive or risky investments, even if there were cheaper alternatives, under what was known as the “suitability standard.” That rule said that investment recommendations needed only be “roughly suitable” for the client.
But financial companies argued that the regulations were unduly burdensome and costly to implement. Additionally the rule could limit investment options for middle-income Americans. In part, that’s because financial advisors who work on commission have historically maintained lower investment minimums than other advisors who are already fiduciaries.
The recent delay takes both sides into account. Financial companies get more time to prepare, but the spirit of the rule is still intact. Starting June 9, the agency said they will be implementing the first portion of the rule that holds financial advisors to a set of higher standards.
The Impartial Conduct standards will require professionals to act in your best interests when giving advice on retirement assets, as well as mitigate any potential conflicts of interest. Additionally, advisors need to charge reasonable fees and cannot lie to you.
“There’s a need for this rule and the spirit of the rule is quite reasonable,” says Marcia Wagner, an attorney specializing in retirement and securities laws.
2. Portions of the Rule Are Still Under Review
This is not a simple 60-day delay across the board. While the new set of higher standards are slated to now go into effect in June, many more complicated (and controversial) aspects of the rule—including requiring a written contract and other expanded disclosures—are going to get further review and could be delayed beyond January 2018.
Complying with President Trump’s order asking for additional analysis of the rule, the Labor Department will undertake a review looking at its economic impact. The agency said this will go through the end of the year. Based on their findings, “some or all” of the current rule “may be revised or rescinded, including the provisions scheduled to become applicable on June 9, 2017,” the Labor Department said.
Bottom line: expect further delays and potentially comprehensive revisions of the rule. “It’s going to be a very wild ride,” Wagner says. “I don’t know where this is going to end up and what may or may not survive in the final rule.”
3. You Need to Be a Smart Consumer
What should be on your radar now? You need to be more aware of the financial advice you receive. If you do work with a financial advisor, ask them if they are a fiduciary and therefore obligated to act in your interests above their own.
If they’re not, or you’re looking to switch advisors for other reasons, check out groups like the Financial Planning Association or the Garrett Planning Network. Both organizations consist of registered investment advisors, who are required by law to act as fiduciaries. And if you’re only looking for occasional advice, the Garrett Planning Network has advisors who work on an hourly fee basis.
There are also several tools on the market that can help you can also check out the advice they give you. Take, for example FeeX (recently named one of MONEY’s helpful apps). You can use the app to look up what you are paying your advisor or retirement plan directly, as well as the cost of individual investments like mutual funds.