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An Update on the DOL (Department of Labor) Fiduciary Rule

An Update on the DOL (Department of Labor) Fiduciary Rule

May 10, 2017 | Blog

Before we dive in, we want to share that the FIRST FULL EPISODE of our podcast “Gimme Some Truth” is now live on iTunesandSoundcloud. Be sure to check it out and hit “Subscribe” so that you don’t miss our weekly installments. We hope you enjoy!

An Update on the DOL Fiduciary Rule

In 2016, we wrote a blog post on the DOL’s proposed fiduciary rule. Since then the rule’s progress has moved closer to implementation. But, it has recently been reviewed and delayed by the Trump administration until at least June 9th. The initial rule has already been published in the Federal Register as of June 7th, 2016. However, the implementation was originally set for April 10, 2017. These delays cast into doubt whether the rule will ever be implemented, as the “DOL rule” is starting to find its way into Dodd-Frank replacement bills.

Firms have spent vast sums of money getting ready for the rule. This includes many that are deciding whether or not to accept commissions from the sale of investment products. Those firms that do continue to accept commissions will be subject to additional compliance in the form of a “best interest contract”.

What This Means for Walkner Condon

Our position on the rule remains the same – we support regulation that requires investment advice to be in the client’s best interest at all times. Millions of dollars are lost each year by advisors that provide conflicting advice. A move towards compensation in the fee-based or fee-only forms leads to a more transparent outcome in our opinion. Clients know they are paying fees and deserve to be made aware of what they are. We believe that receiving commissions from investment products inherently creates biased advice. Therefore, we would also support taking the DOL rule one step further and ban commission-based investments altogether. We believe a uniform fiduciary standard and minimum education and experience requirements for advisors should also be implemented. This will further protect investors and assure that the advice they are getting is an unbiased and educated as possible.

We will keep you posted as the rule’s implementation unfolds. For our clients, we do not anticipate that it will mark a significant change in the way we do business, regardless if the rule changes significantly or not.

-Clint & Nate

Walkner Condon Financial Advisors is a registered investment advisor with the SEC and the opinions expressed by Walkner Condon Financial Advisors and its advisors in this piece are their own. Registration with the SEC does not imply a certain level of skill or training. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice.

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