February 21, 2017 4:48 PM

The U.S. Department of Labor’s fiduciary rule, revered by some financial services experts as a revolutionary shift within the profession  and reviled by others has an uncertain future. Across financial planners and their firms, the DOL Rule is arguably the most talked about, anticipated, and overwhelming topic of the past year.

With so many decisions and outcomes affected by the Phase One implementation deadline, President Trump’s efforts to possibly delay or eliminate the rule have added a layer of complication to the DOL Rule’s existing complexities. What advisors and financial services professionals may want to understand above anything else is, “what’s actually going to happen this year and how will I be affected?”

Dr. Craig Lemoine Headshot.jpg

Dr. Craig Lemoine, CFP®, Associate Professor of Financial Planning at The American College of Financial Services, seeks to address this concern in this exclusive interview:

There seems to be a new article published every day about what we should expect this year.  What impact will the Trump administration have on the DOL Rule?

CL: I've read anything from a 60-day hold on the rule, to a six-month hold, to stripping the rule away. Those options on the table the future is hazy with a side of repeal. But even if the rule does dissipate the industry moved. One of the biggest broker/dealers in the world moved retirement accounts to a fee-based platform. Property/Casualty companies have left the retirement space and new fee models (retainer fees/percent of wealth fees) are gaining traction in the registered investment adviser market. These shifts have been made and may put pressure on the DOL to keep some elements of the rule intact. My advice to firms is to continue making products that put clients’ interests first and develop sound processes that can stand either fiduciary or suitability standards of care.

If the DOL Rule survives the Trump administration, how do you believe the DOL Rule will affect the financial services profession in 2017?

CL: The DOL Rule has already moved the needle. Firms are headed to the fee space or have made it to the fee space and aren't turning around. Even if the rule dissipates these changes have taken hold. Look for new compensation models (retainer fees – like paying for a gym membership, or percent-of-wealth fees).

If the DOL Rule were to survive the new administration, elements of it need to be clarified. This clarification will enhance the profession. Most advisors already work toward the best interest of their clients. Clarifying a workable chassis to evaluate the process will make the profession flow and expand.

What advice would you give to financial planners – whether new, mid-career or experienced veterans – for either capitalizing on the implications of the DOL Rule or avoiding career missteps?

CL: Do the right thing. Sell products to others you would buy yourself. Live by the cannons and pledge of The American College of Financial Services.

Ambiguity and uncertainty surround the fiduciary rule is nothing new. Those who anticipate the future of their practices being shaped by outcomes of its implementation will follow progress and delays closely. While waiting for definitive answers, financial planners can use the additional time to learn as much as possible about the DOL Rule. Understanding how to comply with and capitalize on a redefined fiduciary standard is critical to remaining relevant in a transformed regulatory landscape.

Next Steps

If you found Dr. Lemoine’s insights valuable, you will also find value in The College’s "DOL Rule Toolkit." The Toolkit is a one-stop online resource designed to provide the most comprehensive and reliable online repository of information, education and tips for mastering the rule. Access the Toolkit and fully prepare for the extended Phase One deadline.


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