CATO Institute- DOL Fiduciary Rule: It's Not Always Fun to be Right

by Thaya Brook Knight | August 17, 2017
When the Department of Labor (DoL) rolled out its fiduciary duty rule last year, I (and others) noted that its likely effect would be to harm the very people it purports to protect. Unfortunately, it seems I was right.
When the Department of Labor (DoL) rolled out its fiduciary duty rule last year, I (and others) noted that its likely effect would be to harm the very people it purports to protect.  Unfortunately, it seems I was right.
...
It seems a recent poll of the industry shows my predictions may be correct.  According to a letter submitted to the DoL by the Financial Services Roundtable, its members have reported the following trends as a result of the rule:
...
Specifically, the poll found that 68 percent of respondents would be taking on fewer small accounts due to increased compliance costs and legal risks.  It also found that 63 percent expected that the new rule would limit the investment options or products the firms could provide to their clients.  And that 52 percent expected that higher compliance costs would be passed on to clients in the form of additional fees. Only 12 percent of respondents said the rule “is helping me to serve my clients’ best interests.”  Most notably, the poll report highlights the following: “Even advisors who say that the rule is ‘helping me to serve my clients’ best interests’ or has had ‘no impact on my ability’ say that there will be more complicated paperwork and fewer small accounts.”
...
Read more here.
Harper Polling