The Department of Labor (DOL) is seeking to further delay implementing the remaining parts of the fiduciary rule until July 2019.
The department made the admission in a court filing as part of an ongoing lawsuit with Christian wealth management firm Thrivent Financial.
Led by labor secretary Alexander Acosta, the DOL then submitted on Wednesday a proposal to the Office of Management and Budget (OMB), pushing back the applicability date for three fiduciary exemptions from January 1 2018 to July 1 2019.
The DOL delay proposal, which must be approved by the OMB before it can go into effect, would apply to the best interest contract exemption, class exemption and prohibited transaction exemption 84-24.
The best interest contract exemption would allow brokers to charge compensation that varies for different financial products they sell as long as they sign a legally binding agreement to put clients' interests first.
The DOL said the notice would become publicly available the morning after submission. It was not included in the OMB's list of regulatory actions under review by the end of Wednesday.
If fully implemented, the DOL rule would require all financial advisors to act in the best interests of their clients with regards to assets in retirement accounts.
Two parts of the rule - the definition of a fiduciary and compliance with the ‘impartial conduct standards’ - officially became applicable on June 9.
Minneapolis, Minnesota-based Thrivent Financial has filed a series of lawsuits against the DOL since September 2016.
It has argued that the DOL overstepped its authority by allowing advisory clients to file class-action lawsuits as part of its best-interest contract exemption, which would dramatically reshape the way life insurers and financial service providers like Thrivent can market and sell mutual funds, variable and fixed annuities.