The fiduciary rule, which is expected to take effect in April, means big changes for advisors and how they guide their clients on retirement. “By April 10, all advisors working with clients’ retirement accounts are expected to act under a stricter ‘fiduciary’ standard,” wrote Tim Grant for the Pittsburgh Post Gazette.
Even though some speculate that the Trump Administration could halt the rule, advisors must prepare. “A lot of financial advisors will be scrambling in the next couple of months if they want to meet the April 10 deadline for the implementation …” wrote Karen DeMasters for Financial Advisor, citing research from AssetMark. Of the 400 advisors surveyed, “only 34 percent understand the new regulations well enough to implement them.”
To get started, DeMasters suggests reviewing one’s client base and inventory.
“With or without the DOL rule, advisors should review their client base so they can better understand their business and their clients’ needs,” she wrote. Advisors should also review what products their clients have and prepare to make changes.
Understanding the law better will also help advisors comply. Tamika Cody’s Financial Advisor IQ explainer video about the fiduciary rule highlights how the law became final and specific areas advisors should watch, including:
- Large firms discontinuing sales of commissioned products in retirement accounts.
- Small firms merging with bigger ones to cope with the cost of making changes.
- The launching of new share classes to help advisors comply, according to ThinkAdvisor.
- The Securities and Exchange Commission unveiling a broader version of the rule that could apply to stock brokers.