The Labor Department is moving ahead with new rules that force everyone who provides investment advice on retirement assets to put their clients' interests first -- despite all the lobbying from broker groups.
The ERISA cops at Labor are moving forward with their new requirement that all advisors handling IRA and employer-sponsored accounts act as true fiduciaries.
That means no conflicts of interest whatsoever. It does not mean "acting against the client's interest is OK as long as you disclose what you're doing." It does not mean all advice only has to be "suitable."
The only gray area from their point of view now is what exactly constitutes investment advice.
Needless to say, there are people out there complaining that this is going to make them dump their smallest IRA clients because switching to an asset-based fee would make these accounts unprofitable to work with.
However, despite claims that these millions of accounts will go without guidance, there are also plenty of advisors eager to pick them up.
The devil isn't in the compensation model or the level of duty that advisors owe their clients. The devil is in the pricing.
Any advisor who can figure out a way to serve small accounts efficiently can still do a good job without bankrupting the client or taking a personal loss. Honest.