What Is the Fiduciary Rule?

From time to time, I write about the Department of Labor’s Fiduciary Rule. Originally, the financial services industry—brokerages, advisors, and banks—largely opposed it. But over time, many began to support the change. I’ve covered that shift [here].

The core of the rule is this: brokers must act in the best interests of retirement savers, rather than selling products that are just suitable (and potentially more lucrative for them). It sparked resistance from financial firms, who claimed the rule limited consumer choice and increased compliance burdens.

“The rule requires brokers to act in the best interests of retirement savers, rather than sell products that are merely suitable but could make brokers more money.”

How the Industry Adapted (and benefited)

Despite early opposition, it didn’t take long for firms to realize they could actually charge clients more under the guise of fiduciary care—mainly by shifting them into fee-based accounts that create recurring revenue.

“Firms are pushing customers toward accounts that charge an annual fee on their assets… and such fee-based accounts have long been more lucrative for the industry.”

Once they saw the profit potential, the narrative flipped. Firms like Merrill Lynch even launched ad campaigns around fiduciary advice.

“Bank of America Corp.’s Merrill Lynch has embraced the rule, even running an ad campaign around the idea of fiduciary advice.”

Still, not everyone’s on board. Some firms continue to voice opposition, like Stifel’s CEO, whose commission-based business model doesn’t fit well under the new rule.

The Real Issue: Mislabeling and Confusion

Why the holdouts? There are two possible reasons:

• The increased revenue from fee-based models might be offset by higher costs.

• Some genuinely believe the rule limits client choice and flexibility.

Either way, I think both arguments miss the point.

A fiduciary model—done right—is what’s best for clients. When someone entrusts you with their life savings, you have a duty to act without conflicts of interest. If two investments are similar, but one pays you more, that’s a conflict. There’s no room for that in a true fiduciary relationship.

But here’s the catch: today’s fiduciary rule allows salespeople to call themselves fiduciaries. That’s not just misleading—it’s damaging. It creates confusion for consumers and undermines trust in the very standard the rule was meant to uphold.

DuckTales (Yes, Really)

Anyone who’s spent time around me has probably witnessed the DuckTales theme song mashed up with Single Ladies by Beyoncé. It’s like my generation’s Dark Side of the Rainbow.

It brings me immense joy—because let’s face it, the DuckTales theme is possibly the catchiest single minute of music ever created. If you’re curious about the song’s origins and why it’s stuck in your head decades later, you’re in luck.

“As a piece of music, the DuckTales theme has an extraordinary tendency, as neurologist Oliver Sacks described the phenomenon in his book Musicophilia, to ‘bore its way, like an earwig, into the ear or mind.’”

If that kind of deep dive into nostalgia and neuroscience is your thing… you’re welcome.

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