The Biden Administration has recently finalized the Retirement Security Rule, set to take effect in September 2024. This new regulation aims to protect investors by expanding the definition of who is considered a fiduciary and clarifying the duties these advisers owe to their clients.
But the chances are this new rule probably won’t affect you much.
Key points of the rule include:
- More advisers will be classified as fiduciaries, including those offering one-time advice (this does not apply to you if your advisor is already a fiduciary or if you have a reoccurring relationship with your advisor).
- Advisers must provide prudent, loyal, honest, and fairly priced advice (I really hope you already have this).
- The rule is estimated to save Americans billions over the next decade, particularly benefiting small-plan participants (if you work for an employer that has more than 100 employees then this probably won’t affect you much if at all).
Like I mentioned, this rule is unlikely to cause significant changes in your current advisory relationships since you’re likely already working with fiduciary advisers who adhere to these standards (if you’re not, we need to chat).
However, it’s worth noting that some industry groups argue this rule could make accessing financial advice more difficult for average Americans, as fiduciary advisers typically work with clients having at least $100k to invest giving small investors nowhere to turn.
Here is a Yahoo! Finance article that explains it well: