Softer New Fiduciary Rule Released

April 06, 2016

‘Great News For ETF Industry’

“Overall, this is great news for the ETF industry,” Nadig added. “For many kinds of investors, ETFs are the cheapest, most tax efficient, most flexible products on the market. It's also great news for index products in general. A fiduciary advisor would need to feel confident they could prove—potentially in court—that they are better than average at picking active managers. That's a pretty high bar.”

To Ritholtz Wealth Management CEO Josh Brown, there’s little to be excited about. “My initial read on the DOL's final fiduciary rule: Literally nothing changes,” he said on Twitter this morning. “Biggest impact is added disclosures to websites. Seriously.”

And others, such as Financial Services Institute’s President and CEO Dale Brown, are reserving judgment for now.

“Affordable, objective financial advice is a critical component to hard-working Americans’ ability to save for a dignified retirement,” Brown said in a release. “The Department of Labor’s two earlier proposals were complex and unworkable. As we have said since day one, there is no compelling evidence this rule is necessary to achieve a uniform fiduciary standard, and the DOL’s own analysis fails to make the case.

Changing Retirement Landscape

“We will spend the coming days thoroughly analyzing this rule to determine if it protects Main Street investors by preserving their access to affordable, objective financial advice delivered by their chosen financial advisor,” he said.

The DOL’s new regulation strives to establish best practices for a changing retirement landscape.

“The Department’s conflict of interest final rule and related exemptions will protect investors by requiring all who provide retirement investment advice to plans and IRAs to abide by a “fiduciary” standard—putting their clients’ best interest before their own profits,” the DOL said on its website.

Contact Cinthia Murphy at [email protected].

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