Fiduciary Rule’s Impact

WSJ Wealth Adviser Briefing: Fiduciary Rule’s Impact
By
Michael Wursthorn
Jun 12, 2017 5:30 am ET
A landmark retirement-savings rule’s fate remains uncertain, but one thing is clear: Starting last week, retirement savers are entitled to investment advice that serves their best interest.
As of Friday, brokers and insurance agents must adhere to the best-interest standard, or the spirit of the fiduciary rule. That means advice must be based on clients’ interests, rather that than the financial interest of the adviser or firm. But while wealth managers and insurance sellers are on the hook to act as fiduciaries starting June 9, it’s essentially on the honor system until Jan. 1.
The Labor Department pushed out the compliance deadline for certain parts of the regulation, including its enforcement, giving the industry more time to adjust and potentially preventing compliance with elements that could be revised after the review. That means advisers don’t have to provide clients with a best-interest contract until January, and some client disclosures about compensation and conflicts aren’t yet required.