What's New with the Fiduciary Rule?

February 14, 2017

Last August we wrote about the Department of Labor issuing what has become known as the Fiduciary Rule which was intended to go into effect in April of this year. The rule would require both RIAs and brokers to uphold the fiduciary standard. On February 3rd President Trump issued an executive order delaying the implementation of the Fiduciary Rule as part of his promise to deregulate the financial sector. Several days later a judge in Dallas ruled to uphold the Fiduciary Rule against a group of nine financial industry trade groups. The judge also denied a motion from the Department of Justice for a stay.

 

The battle will likely continue but however things play out, we will likely still see an increased use of the fiduciary standard because firms have already spent a considerable amount of time and money implementing the rule. This is good news for individual investors as it requires brokers to provide customers with the best possible investment and not simply one that is suitable. The rule was created to counter brokers using high cost/high commission investments to customers that were beneficial to those selling them but not always appropriate for the clients. As an RIA, Cedarstone has always held to the fiduciary standard and will continue to seek the most cost-efficient, high-quality investments for our clients.

 

Block, Sandra. “Why the Fiduciary Rule for Retirement Savers Is Here to Stay.” Kiplinger. February 5, 2017. http://www.kiplinger.com/article/retirement/T047-C000-S003-fiduciary-rule-for-retirement-is-here-to-stay.html.

 

Schoeff Jr., Mark. “Dallas judge upholds DOL fiduciary rule.” InvestmentNews. February 8, 2017. http://www.investmentnews.com/article/20170208/FREE/170209907/dallas-judge-upholds-dol-fiduciary-rule.

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