After lengthy delays and attempts to kill the regulation, the Department of Labor’s Fiduciary Rule went in to partial effect in June 2017. Now, the fifth circuit court has struck down to the rule, after concluding that the rule “overreached” and was “unreasonable.”While the ruling could end the Fiduciary Rule as law, it cannot erase the awareness the DoL raised nor can it stop market forces leading the business towards a more ethical place.

Fiduciary Rule as Law May Still Exist

Despite the ruling, attorneys note that the Department of Labor has many ways to respond. First, it could ask the Supreme Court to hear the case given that several circuit courts have reviewed the rule and come to different conclusions. Second, it could simply ask the fifth circuit court to reconsider its decision, in which all the judges would review the rule again. In each of the scenarios, the DoL could request a stay of the latest ruling. Lastly, the DoL could let the decision stand and start over on a new rule that addresses concerns the court had.

The Department of Labor is not the only group looking to implement a fiduciary rule for financial advice either. The SEC is currently writing its own version of the DoL’s fiduciary rule. The proposed rule is expected to require brokers to provide advice that puts the clients’ interests first while also requiring up front disclosures regarding fees, services, and conflicts of interest. The SEC hopes to vote to propose it rule by the end of the second quarter of 2018.

Impact Extends Beyond the Law

While the DoL’s Fiduciary Rule as law may be on its last legs, the impact on the industry is not something that can just be wiped away. As Vanguard founder John Bogle said in a New York Times op-ed, “the fiduciary rule may fade away, but the fiduciary principle is eternal. The arc of investing is long, but it bends toward fiduciary duty.”