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How the Fiduciary Rule Affects Ordinary Clients


The DOL Fiduciary Rule is at least partially now in effect, and, until now, the overarching question has focused how the new rule will impact financial advisors.

But hold the phone – shouldn’t the real question be how the new rule impacts the ordinary investor?

The answer to that question is a resounding “yes,” especially for financial advisors fielding queries from clients concerned about the rule’s impact. Those advisors can expect to hear about issues near to the client’s heart, such as fees and investment management.

To prepare for those questions, advisors should conduct a thorough and transparent “DOL client impact assessment.”

Focus on these key areas:

Changing fees – “Investors can expect to see a reduction in mutual fund fees, and more so over time,” said Charles Field, co-chair of Sanford Heisler Sharp's Financial Services Litigation practice. Up until now, brokers were required by law to charge investors the sales commission that a mutual fund disclosed in its prospectus, Field explained. And some of the fees were quite high (5 percent or more) and deviations were not permitted. “Additio