So, after all the buildup and shifting of financial advising strategies throughout the industry to comply with the Department of Labor’s (DOL) Fiduciary Rule – which would apply a fiduciary standard to any advisor dealing with retirement planning, the President Trump has issued an Executive Order rolling back that rule and preventing it from going into affect. But, will it have that substantial of an impact? Maybe not.
This ruling from the DOL has taken quite a while for firms to adapt. Some have left the market entirely. This is all well before the deadline for the rule to go into affect. Training, internal policies, marketing, and internal regulations have already been changed in anticipation of this rule. It’s unlikely that all of that work will just be undone just because the ruling was withdrawn. Some advisors, Certified Financial Planners (CFPs) for instance, already held themselves to a fiduciary standard, and the rule or lack thereof will not change that.
There are currently, and now will still be, some “financial advisors” who take advantage of people and sell them products that are not in the client’s best interests. The DOL rule was meant to prevent this sort of thing from happening. Now, advisors who may have been substantially impacted by the rule will now be spared – and that’s potentially dangerous for the general public.
For now, consumers will largely be on their own when it comes to determining whether an advisor has their best interests at heart when developing a financial plan. If you find yourself seeking a new advisor (or are seeking one for the first time), do your research and inquire whether the advisor is a fiduciary or whether he or she holds himself or herself to a fiduciary standard.