A press release from the Department of Labor (DOL) suggests a preliminary version of the anxiously awaited fiduciary rule will be released following a media conference call scheduled for 2 p.m. EST.

U.S. Secretary of Labor Thomas E. Perez will host the call alongside Jeff Zients, director of the National Economic Council and assistant to President Obama for economic policy. The pair is expected to outline changes to the proposal that have been made since its initial introduction and withdrawal back in 2010 and 2011, as well as the challenging path forward for a new fiduciary rule.

Today’s conference call represents just the latest step in a long and somewhat tortured history for the effort the DOL is now referring to as the “consumer protection proposal.” Originally floated as the “fiduciary redefinition” or “conflict of interest rule,” the rule still has some way to go before full adoption. The initial version sparked huge industry backlash from advisers and industry service providers who felt their business practices were being mischaracterized and inappropriately punished.

Many practitioners across the retirement plan services arena started making that argument again when President Obama in February strongly backed the Department of Labor’s ongoing fiduciary redefinition effort, with the president advocating for a strengthened fiduciary standard that would apply to more people working as investment professionals. The common warning from this group is that a strengthened fiduciary standard will have the opposite effect of that intended—potentially shutting out smaller-balance clients from receiving cheaper forms of non-fiduciary advice or education.

Still, other groups of advisers and industry practitioners aren’t fretting the fiduciary fight—namely because they already operate as fiduciaries for most or all clients. This group also argues new technologies and business approaches mean it shouldn’t cost much, if at all more, for advisers or brokers to start taking on more fiduciary liability.

Republican members of Congress have pledged swift preventative action to block the new fiduciary rule proposal from DOL, should it be perceived to be overly punitive to the adviser and investment manager community. One bill would draw a line and put the Securities and Exchange Commission (SEC) at the head of it, allowing the commission to propose its own new definition of fiduciary first, and stopping the DOL from any rulemaking on a fiduciary definition under the Employee Retirement Income Security Act (ERISA) until 60 days after the SEC’s definition takes hold. The Dodd-Frank Act authorizes the SEC to set rules on fiduciary standards of conduct, extending them to broker/dealers. The future of any of these efforts is very cloudy, given that President Obama himself would need to sign them into law, barring a veto-proof majority of Republicans and Democrats. 

And just a few weeks back, the SEC signaled its own intent to move sooner rather than later on its own changes to investment advice and conflict of interest rules, further complicating the regulatory picture. All of this leaves the industry in a serious state of flux, so stay tuned to www.planadviser.com this afternoon and throughout the week for valuable industry insights and responses to today’s big DOL news.