There has been a lot of hope lately about the likelihood for the SEC to take control over the fiduciary rule and craft a comprehensive new regulation. However, the odds of the SEC doing so look increasingly long. The agency itself has made several distancing comments lately, such as SEC chief Jay Clayton admitting there was “no silver bullet” for a new rule. Not only does the SEC have the big challenge of harmonizing a fiduciary rule across all types of accounts, but it is facing a fierce and divisive political climate. Many states are already crafting their own fiduciary rules, another factor the SEC must overcome as it needs to appease all the states. There is also internal division within the SEC, as some commissioners are against the crafting of a new fiduciary rule, while others are for it.
FINSUM: On top of all these headwinds, there is also the constant barrage of lawsuits which will try to stop the SEC at every turn. We think it will take several years for the SEC to make a rule, if it ever even gets there. That means we will either need to live with the DOL fiduciary rule, or it will be tossed out once and for all.