One Simple Step to Get Good Investment Advice
You don't have to wait for the Labor Department to enact its new fiduciary rule. Make your adviser sign the pledge at the bottom of this column.

By now it's certainly no surprise that the Department of Labor has issued its long awaited missive on fiduciary duty. With over 1,000 pages, there is a lot to absorb; however, I believe the DOL has done a Solomon-like job of streamlining, simplifying and clarifying the rule. Although, like many other supporters of the fiduciary concept, I would have liked to see something stronger, I do believe the actions of the DOL will absolutely make the system fairer.
The result is amazing and to be applauded, especially given the realities of today's political constraints. Multiple millions of dollars have been spent lobbying against the implementation of a DOL rule. Michael Piwowar, a commissioner of the Securities and Exchange Commission, opines that the rule "seems to ignore the chorus of voices that questioned whether it will restrict middle-class families' and minority communities' access to professional financial advice by making retirement advice unaffordable." Senator Johnny Isakson of Georgia stated, "This fiduciary rule will harm countless Georgians who have worked hard to make sure they make wise financial decisions for their families' futures. For families across the country, this rule is essentially the Obamacare for retirement planning, and I will do everything I can to overturn this rule."
The argument that small investors (i.e. the "countless Georgians") will lose access to advice is balderdash. First, brokers do not provide advice. If they did, they would have to do so as investment advisers and would already be held to a fiduciary standard. Second, there is a large universe of fiduciary advisers who are ready, willing and able to provide substantive advice. Third, as we've already seen, traditional commission-based platforms will quickly find a way to continue to operate under the new rule; for example, see LPL Cuts Prices, Account Minimums Ahead of DOL Fiduciary Rule.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In fact, firms are provided significant latitude in how they adhere to the new rule. As the DOL noted, "Rather than create a highly prescriptive set of transaction-specific exemptions, the Department instead is publishing exemptions that flexibly accommodate a wide range of current types of compensation practices, while minimizing the harmful impact of conflicts of interest on the quality of advice."
However, the rule does have its shortcomings. While IRAs may be subject to fiduciary standards, the old suitability standard—with all of the potential conflicts of interest—will still hold true for non-IRA accounts.
Also, advisers can expect to hear more from their compliance officers. Under the current suitability standard, if there is a dispute, the ultimate responsibility for proving the claim rests on the shoulders of the client. Under a fiduciary standard, the responsibility shifts to the adviser. This is a distinction not lost on compliance departments. As a consequence, I believe the enforcement of fiduciary standards will not be a result of detailed rules and micro-managing regulators, but rather the actions of firm compliance departments and ultimately the results of arbitration and court rulings.
I believe the DOL rule is a seminal event that will significantly improve the investment outcome of individual investors for decades to come. My friend Bob Veres, publisher of Inside Information and longtime industry observer, best summed it up:
"…overall, the new rule fundamentally (and with pretty [much] zero exception) requires the broker… to act as a fiduciary. That brings a lot of people into the principles-based universe, which is alien territory for the brokerage firms… My take is that the DOL was a bit sly about its concessions, making it harder for the wirehouse arguments to prevail in court should there be (as I think there WILL be) a legal challenge to these provisions.
That means that this is a milestone for the planning profession, a stake in the ground further than anyone has gone before in the fiduciary requirement space."
Finally, as legislators, businesses and the courts go about interpreting and implementing the more than 1,000 pages, individual investors might happily ignore the activity by simply having their advisor sign the Committee for the Fiduciary Standard's mom-and-pop ">fiduciary oath (see below or click on the link for a printable version of the oath). With that signed and in hand, you will at least know that your relationship with your adviser is structured so that your interest comes first, even with your non-IRA accounts.
Harold Evensky, CFP, is Chairman of Evensky & Katz, a fee-only wealth management firm and Professor of Practice at Texas Tech University.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Harold Evensky, CFP® is Chairman of Evensky & Katz, a fee-only investment advisory firm and Professor of Practice in the Personal Financial Planning Department at Texas Tech University. Evensky served as Chair of the TIAA-CREF Institute Advisor Board, Chair of the CFP Board of Governors and the International CFP Council. He is on the advisory board of the Journal of Retirement Planning and is the Research Columnist for Journal of Financial Planning. Evensky is co-author of The New Wealth Management and co-editor of The Investment Think Tank and Retirement Income Redesigned. Mr. Evensky has received numerous awards over the years. The most recent is Investment Advisor Magazine, 2015 IA 35 for 35 recognizing the advisor advocates, investors, politicians and thought leaders have stood out over the past 35 years and will influence financial services for decades to come. Don Phillips of Morningstar called Mr. Evensky the dean of financial planning in America.
-
Last Call for Fortnite Refunds: Parents Can Still File a Claim
The FTC is sending out $126 million in refunds to families whose kids were charged for unwanted items in Fortnite — and there’s still time to file a claim.
-
Stock Market Today: Stocks Swing as Trump Scraps Canada Trade Talks
Despite a mid-afternoon slip, the S&P 500 and Nasdaq ended the day at new record highs.
-
Why Smart Retirees Are Ditching Traditional Financial Plans
Financial plans based purely on growth, like the 60/40 portfolio, are built for a different era. Today’s retirees need plans based on real-life risks and goals and that feature these four elements.
-
To My Small Business: Well, I've Been Afraid of Changin', 'Cause I've Built My Life Around You
While thinking about succession planning might feel like anticipating a landslide (here's to you, Fleetwood Mac), there are strategies you can implement to manage the uncertainty and the transition.
-
These Are the Key Tariff Issues to Watch in Coming Months
While they're not dominating headlines right now, tariffs are not over. Some key dates are coming up fast that could upend markets all over again.
-
Technology Unleashes the Power of Year-Round Tax-Loss Harvesting
Tech advancements have made it possible to continuously monitor and rebalance portfolios, allowing for harvesting losses throughout the year rather than just once a year.
-
The Fiduciary Firewall: An Expert's Five-Step Guide to Honest Financial Planning
Armed with education and awareness, you can avoid unethical people in the financial industry by seeking fee-only fiduciaries and sharing your knowledge with others.
-
How Private Capital Could Be the Key to Rebuilding America
Private capital investment in infrastructure could be a more efficient and effective alternative to government funding, potentially stimulating the economy during uncertain times, creating jobs and delivering projects on time and within budget.
-
Real Estate Bridge Funds: An Expert Guide to Investing in a Volatile Market
Investors looking for passive income are buying into these funds, which offer capital to borrowers for short-term financing.
-
Bill Bought a Fridge, and Then His Nightmare Began
A Lowe's customer reached out to me after he encountered the retailer's 48-hour return window for major appliances when his brand-new fridge turned out to be defective.