Approximately a year ago, I wrote of my support for the spirit of the DOL’s Fiduciary Rule, while admitting to reservations about its implementation and the effect it may have on the smaller investors it was intended to protect. Well, with a new President and administration who are promising a wave of deregulation, speculation says that the Fiduciary Rule could be a target. At the time of this writing, the rule remains in place, and it cannot be undone via executive order but rather through agency regulation, which does not make it immune. If the new administration wishes to place the rule in their crosshairs, they should instead fix it to be more manageable while maintaining the fiduciary standard.

The spirit of the rule is to align investors and the industry giving them advice, but as it stands today it is too cumbersome, complex, and cost-prohibitive. The best interest contract exemption hurts small investors by making the increased liability for advisers cost prohibitive. Plan sponsors have an onus to understand the different fiduciary roles that their advisers may have for their plans—and the potential conflicts.

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