Labor implemented the rule's impartial conduct standards in June of this year. Those require all advice on IRAs and defined contribution plans to be in investors' best interest. The impartial conduct standards remain in effect.

But the delay means broker-dealers, insurance companies, and registered advisors will not have to comply with the rule's more stringent conditions, which include enforceable contracts, disclosures, and warranties that guarantee investors are not getting conflicted advice.

Labor proposed the 18-month delay at the end of August, when it opened the proposal up for a 15-day comment period. Regulators have reviewed the proposal for 90 days. The final delay is no different from the proposed delay, according to the Labor Department.

Asset managers, 401(k) service providers, and broker-dealers have been lobbying for the rule to be rescinded or significantly revised. Critics of the fiduciary rule argue that it is exceedingly complicated and costly to implement.

They also say that because the rule favors fee-based compensation over commission-based compensation, investors with smaller account balances will be priced out of the retirement advice market.

But consumer advocates have argued that full implementation of the rule is necessary to address compensation models that incentivize some brokers, advisors, and insurance agents to sell expensive products that are not in the best interest of retirement investors.

Full faith in the impartial conduct standards

Beyond giving advice in investors' best interests, the impartial conduct standards require that compensation on advice be reasonable. The standards also prohibit the dissemination of misleading information.

According to Labor's justification behind delaying the full rule, the impartial conduct standards will adequately protect investors from conflicted advice during the extended transition period.

"It is based on the continued adherence to these fundamental protections that the Department is making the necessary findings and granting the extension until July 1, 2019," language in the delay states.

Labor says it would be impossible to complete a full review of the rule, and potentially revise it, before the previously scheduled January 1, 2018 implementation date.

The Department says that to date, it is unknown if there will be changes to the rule.

But it also says it will propose a new streamlined class exemption "in the near future." A new exemption for advisors and insurance agents will require input from the Securities & Exchange Commission, FINRA, and state regulators, and cannot be finalized before the original deadline, Labor says.

"The 18-month delay avoids obligating financial services providers to incur costs to comply with conditions, which may be revised, repealed, or replaced," Labor said in its delay of the rule.

"The delay also avoids attendant investor confusion, ensuring that investors do not receive conflicting and confusing statements from their financial advisors as the result of any later revisions," the document states.

While not all stakeholders support the delay, Labor says "a clear majority" of comments from industry were supportive of the 18-month extension.

The Economic Policy Institute, a think tank co-founded Robert Reich, Labor Secretary under the Clinton Administration, says the 18-month delay of the rule's contractual requirements will result in up to $5.5 billion in investor losses over 30 years, because some stakeholders will not adhere to the impartial conduct standards absent the enforcement mechanisms originally designed in the rule.

But Labor says the existing fiduciary enforcement policies under the Treasury Department and the Employee Retirement Income Security Act will ameliorate the possibility of some stakeholders not adhering to the impartial conduct standards during the transition period.

Moreover, Labor says, "it believes that many financial institutions" are already implementing compliance regimes to adhere to the impartial conduct standards.

While some supporters of the fiduciary rule have argued that the Department does not have the authority to issue the delay, Labor says that it can do so under a provision in ERISA that grants the agency authority to issue administrative exemptions.

"The Department is confident of its authority to grant the 18-month delay," regulators said.

Enforcement policy extended throughout new transition period

In a Field Assistance Bulletin published in May of this year, Labor issued a temporary enforcement policy for the fiduciary rule, saying the agency would not pursue claims against fiduciaries, so long as they are working "diligently and in good faith" to comply with the impartial conduct standards.

That policy will continue under the delay, Labor says.

"The Department has determined that extended temporary enforcement relief is appropriate and in the interest of plans, plan fiduciaries, plan participants and beneficiaries, IRAs, and IRA owners," Labor said in extending its temporary enforcement policy.

Related: See our DOL fiduciary rule page