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The DOL fiduciary rule’s effect on small broker-dealers

May 4, 2016

The rule opens the door to future customer litigation and opportunity for regulators to impose sanctions or fines on smaller broker-dealers

May 4, 2016 @ 11:21 am | By Ross David Carmel | Investment News

In the current regulatory landscape, small to midsize broker-dealers are subject to an ever-increasing regulatory burden. The new Department of Labor fiduciary rule simply adds fuel to that fire.

Earlier this month, after five years in the making, the DOL finalized its new fiduciary rule to regulate investment advice in retirement accounts. Prior to this rule, which will take full effect in the next 12 to 18 months, registered representatives working at broker-dealers operated under the suitability standard when providing investment recommendations to owners of retirement accounts. The DOL fiduciary rule dramatically changes this standard and imposes fiduciary status on these registered representatives.

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John E. Moriarty, ChFC
December 2015
February 3, 2016

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