The Department of Labor Fiduciary Rule has been vacated. What does that mean for you?

Back in February of 2015, then-President Obama asked the Department of Labor (DOL) to

“update the rules and requirements that retirement advisors put the best interests of their clients above their own financial interests.” In response, the DOL proposed new regulations in 2016 that became known as the DOL Fiduciary Rule.

History Of The DOL Fiduciary Rule

The DOL Fiduciary Rule basically said that anyone giving advice on retirement accounts had to work in the best interest of their clients. Why did that have to be made into a rule? Because a lot of people who work under the title Financial Advisor are not legally required to put their clients’ best interests first.

There are two different standards that people in the financial services industry are held to. One is the suitability standard and the other is the fiduciary standard. You can learn more about them in this post. The goal of the DOL Fiduciary Rule, and where it got its name, was to make anyone working with retirement accounts subject to the fiduciary standard where they do have to put their clients’ best interests first.

Why only retirement accounts? Because the Department of Labor has no authority over other kinds of investment accounts. In fact, the extent of their authority over even retirement account advice immediately came into question. There was instant, strong opposition to the new regulations and multiple lawsuits.

Demise Of The DOL Fiduciary Rule

Not long after President Trump was sworn in, he asked for a review of the new regulations. Then, full implementation was postponed several times, finally being slated for January 1, 2019.

On June 21, it all came to an end. In a case brought by the US Chamber of Commerce, the American Council of Life Insurers, and the Indexed Annuity Leadership Council, the 5th Circuit Court of Appeals finally killed the rule. In their final order, they wrote, “Finding merit in several of these objections, we VACATE the Rule.”

Is There Any Hope For Investors?

So, what’s next? The DOL unsuccessfully tried to make it so you could trust those giving you advice on your retirement accounts. Does that mean that you can’t trust the financial advice-givers out there and they are all looking out for their best interest instead of yours?

Not necessarily. While everyone isn’t required to work in your best interest, there are still some financial advisors who are. There are still some advisors who are legally and ethically required to do what’s best for you, regardless of how it impacts them.

How Do You Find A Fiduciary Advisor?

Now that we’ve established their existence, how can you find one of these advisors? How do you find an advisor you can trust? The key terms in your search are Investment Adviser Representative and Fiduciary.

Investment adviser representatives are required by law to act as fiduciaries. Fiduciaries are required by law to act in your best interest. So, find one and you find the other. When you talk to a potential advisor, make sure that they are willing to put in writing that they will act as a fiduciary in all matters with you. If they won’t do that, keep looking.

Here are some places to look if you are in the market for some financial advice that’s more personalized than you can get here:

• XY Planning Network– All of these advisors are Certified Financial Planners® who are willing to work virtually, and you can even search for Christian advisors or ones who work specifically with pastors.
  
• Kingdom Advisors– All of these advisors have been trained in biblically wise financial advice and ascribe to a Christian perspective, though they may not all be fiduciaries.
  
• Garrett Planning Network– These are all fee-only advisors, so they are fiduciaries and they have no minimum account requirements.
  
• National Association of Personal Financial Advisors– These advisors are all fiduciaries and have extensive training as Certified Financial Planners®.