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What Changes Will the DOL Fiduciary Rule Bring?

Although the proposed United States Department of Labor (“DOL”) fiduciary rule is not necessarily final, it soon will be, and any version of the rule is going to significantly impact the way financial advisors practice.  Here’s a snapshot of the details:

Who: all advisors and brokers – anyone who provides investment advice

What: moving away from the current standard of “suitability,” which requires that recommended investments be suitable for a client, and imposing a “fiduciary” standard, which requires investments to be in the client’s best interests

Where: nationwide, for all retirement accounts

When: before the end of 2016

Why: the DOL wants to eliminate all conflicts of interest between advisors and clients,  and to provide protection and transparency for investors

The rule will force changes in the way financial advisors run their businesses.  Brokers will be required to reduce the number of products offered and the number of clients serviced.  They will need to meet with clients personally on at least a yearly basis.  Fee structures will need to change to move away from commission-based fees, which are considered to be an inherent conflict.  Client disclosures and compliance practices will also need to change in accordance with the rule. 

Although we do not know exactly what the final version of the rule will state, there are ways you and your office can begin preparing.  Contact an attorney to find out more.


Kelly A. Pressler is an associate and practices General Civil Litigation and Municipal Litigation.  She can be reached by phone at 866-303-9595 toll free or 845-764-9565 and by email.

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