DOL Releases Conflict of Interest Rule

Over the past year, there has been increasing buzz in the financial industry surrounding new regulation from the Department of Labor (DOL). The “Conflict of Interest Rule” proposed by the DOL seeks to apply a “fiduciary standard” to any financial advisor who makes recommendations about clients’ retirement accounts. The ruling is expected to reshape the financial industry and drastically change the commission system that provides compensation for many advisors.


The DOL originally proposed the Conflict of Interest Rule back in 2010; however, opposition to the rule was strong enough that it was defeated in 2011. In early 2015, the DOL and President Obama proposed the rule once again. After its initial proposal, the DOL accepted 3,000 external comments on the rule, using them to finetune the regulation and add necessary exceptions. On April 6, 2016, the rule was finalized and went to Congress for review; the financial industry has until January 1, 2018 to be in full compliance.

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