Franklin Resources Inc. continues to prepare for the implementation of the Department of Labor's Conflict of Interest Rule, but executives expect some change in adoption.
Under President Donald Trump's administration, the rule might take effect six months to a year later than scheduled, Chairman and CEO Gregory Johnson said. Currently, the rule is on track to be implemented in April.
Franklin Resources is setting up to handle the change in advisory standards for retirement savings as it is written, but the company expects that the department could make major changes or even repeal the rule, Johnson said.
The CEO questioned whether the rule, which establishes a fiduciary standard for retirement advice and product sales, is even needed. Answering questions during a conference call to discuss earnings, Johnson suggested that the Securities and Exchange Commission, rather than the Department of Labor, would be the right agency to oversee the standard.
"I certainly think that if you decide that you really do need a rule, that the SEC is an appropriate place for that to be done," Johnson said.
A different standard for retirement investment products would mean change for all of Franklin Resources' business, he said.
Advisers have had a mixed reaction to Trump's election and the new wave of uncertainty over the fiduciary rule's implementation, with some readying for the change and others suspending their preparation, he said.