A new survey report published by Financial Engines argues the fate of the Obama-era Department of Labor (DOL) fiduciary rule has grown increasingly complex and uncertain since President Trump took office.
While the new president, along with Republican leadership in Congress, have expressed a desire to dial back or wholly overturn the fiduciary rule reforms, currently they are still very much intact. The rulemaking’s implementation has simply been delayed, from a previous target date of April 10 to instead take effect June 9.
It remains to be seen what path President Trump and/or Congress may take, but Financial Engines says it is abundantly clear that average Americans favor the implementation of new conflict of interest protections for the retirement plan investing industry.
According to Financial Engines, fully 93% of Americans “think financial advisers who provide retirement advice should be legally required to put their clients’ best interest first.” In fact, more than half of respondents (53%) mistakenly believe that all financial advisers are already legally required to put the best interests of their clients first.
On Financial Engines analysis, these two stats taken together should offer something of a moral imperative to advisers to be more willing to embrace true fiduciary roles.
NEXT: Testing investor understanding of conflicted advice
Compared to a similar survey last year, Financial Engines finds Americans “have a slightly better understanding of the difference between a financial adviser who is a fiduciary and one who is not.” Specifically, 21% say they understand the difference today, compared to 18% a year ago.
“However, many Americans still don’t know how to tell if an adviser is a fiduciary,” Financial Engines warns. “Only 50% of investors who work with a financial adviser are certain that their adviser is a fiduciary, while 38% don’t know if their adviser is a fiduciary or not.”
Christopher Jones, chief investment officer at Financial Engines, warns the “bar is rising.”
“Once people understand the benefits of working with a fiduciary, they want one on their side,” he says. “Consumers want to know that they can trust their financial advisers. According to the survey, if investors discovered their financial adviser was not a fiduciary, many say they would take action.”
The Financial Engines data shows only 12% of investors feel they would continue working with the same adviser in the same capacity, after learning the adviser is not in fact a fiduciary.
Speaking frankly, Jones suggest financial firms and advisers “often parse their words carefully to give the appearance of being a fiduciary, even when they are not … While the debate over the conflict of interest rule has raised consumer awareness about this important standard, investors must still be careful to demand advisors that act in the sole best interests of their clients.”
Additional results from the survey, along with other research reports, are available at https://financialengines.com/workplace/resources.