In March, the Fifth Circuit Court of Appeals issued a decision to vacate the DOL Fiduciary Rule. This decision rejected the regulation that redefined "fiduciary investment advice",
prohibited transactional exemptions and modifications to old exemptions. The DOL (Department of Labor) has until May 7, 2018 to request a rehearing of the case.
What is the DOL Fiduciary Rule?
The DOL Fiduciary Rule came into play last year and expanded the definition of an "investment advice fiduciary" under the Employee Retirement Income Security Act of 1974
(ERISA). The DOL's definition of a fiduciary demands that advisors act solely in the best interests of their clients, and to put their clients' interests above their own. Additionally, there
is no room to conceal any potential conflict of interest and all fees and commissions must be clearly disclosed to clients.
What does this latest update mean for you, as an investor?
Prior to the DOL Fiduciary Rule, only advisors who were providing specific advisory services to retirement plans were considered "fiduciaries". If this rule is officially overturned, financial
advisors will not be required to act as a fiduciary. Since Blackstone has always been a fee-based business and both advisors are CERTIFIED FINANCIAL PLANNERS™, the
implementation or retraction of this rule will not have much impact the way we do business. The CFP® Board Standards require that all CFP® professionals who provide financial
planning services will be held to the duty of care of a fiduciary, for all types of clients and accounts. As Jim and Gregg were certified by the board in 2008 and 2006 respectively, they
have been acting in their clients' best interests long before the DOL rule came into play.