DOL Releases Fiduciary Rule; Exempts Plan Sponsor Education


The U.S. Department of Labor on Wednesday unveiled the final version of its fiduciary rule, which will apply to financial advisors and brokers who give retirement advice.

The rule, though it has been softened from previous iterations, puts in place more stringent rules requiring brokers to act in the best interest of their clients.

More from the Wall Street Journal:

About $14 trillion in retirement savings could be affected by the rule, which requires stockbrokers providing retirement advice to act as “fiduciaries” who will serve their clients’ “best interest.” That is stricter than the current standard, which only says they need to offer “suitable” recommendations, a standard that critics say has encouraged some advisers to charge excessive fees or favor investments that offer hidden commissions.

Still, reflecting intense lobbying from the financial industry that has fought the regulation since it was first proposed six years ago, the final version includes a number of modifications aimed at softening some of the most contentious provisions.

Among such changes: extending the implementation period of the rule beyond the end of the current administration; giving advisers more flexibility to keep touting their firm’s own mutual funds and other products; and curbing the paperwork and disclosure requirements.


The latest rule also clarifies that brokers and others can continue offering a wide range of guidance without having to clear the “fiduciary” bar for “advice.” It specifies that investor education isn’t considered advice, allowing companies to continue providing general education on retirement savings. Also excluded from the advice category are general circulation newsletters, media talk shows and commentaries as well as general marketing materials.

For a great explainer on the rule, check out this Reuters piece.

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