DOL Fiduciary Rule Requirements

Biggest cluster in our industry to date…The question as to what is a fiduciary and whether you are a fiduciary to your client is the subject of nearly every FINRA arbitration or court case if you are an RIA.

Very simply, being a fiduciary means that you must put your client’s interests before your own. End of story.

The SEC had many opportunities to nail this simple definition down and set policy but failed to do so. Then the Department of Labor (DOL) of all organizations stepped in, and completely muffed it. Thousands of pages of drivel and countless hours of debate and letters from brokerage firms’ internal counsel later, nothing has happened. Imagine sitting down to read the phone book (I’m dating myself here), and you’ll have an idea of what the DOL’s proposed rule looked like. When other lawyers would tell me they read the whole thing, I would say, “I’m sure you’ve read War and Peace too.”*

The DOL rule was originally scheduled to be phased in from April 10, 2017, to January 1, 2018. As of June 21, 2018, The U.S. Fifth Circuit Court of Appeals officially vacated the rule, effectively killing it. Not entirely a bad thing. See above.

However, according to language from former DOL Secretary, Alexander Acosta, stated in early May of 2019, the DOL is working with the SEC to resurrect the fiduciary rule. Good luck with that.

If you would like to learn how this really works in today’s courts and particularly in FINRA arbitration settings, where panelists are free to make up the rules as they go along and disregard whatever laws or regulations they like, contact me. I will help you navigate this issue in an otherwise bewildering regulatory and litigation environment. While many lawyers live to make things more complicated than they need to be, I do not. My job is to make things simpler for you so you can get back to work and make a living.

*No one has read War and Peace.