While clearly this trend benefits me, I have doubts about its advisability as policy. Is this a good idea for all clients? Some wouldn't want that level of care and cost, and small clients will get priced out of the market for advice. Many will end up with some 1-800 service or an algorithm service like Betterment, with no advisor who knows them and their family. We already help more clients get out of Betterment than get into it. This shows that clients want more advice, not less. This is especially true of the larger accounts, where our fees are roughly the same and the service is remarkably different.

Singling out retirement accounts for special legislated treatment also has other warped outcomes. What do you do when a client has a more passive and cheaper approach in his non-IRA accounts and gets a cheaper fee? But the more active strategy in the IRA may be a good idea for tax reasons. Strict interpretation of the new fiduciary rule would say that retirement accounts must be treated "best". This example would be a violation since the IRA's fee is higher. But what about the taxes you might save? That presents a situation where benefiting the client overall might pose a liability to the advisor since the IRA is being singled out as different with a higher fee. Our compliance attorney suggested increasing client fees on the other accounts to lower the distinction in IRA accounts as a method to reduce liability. That's a non-starter for us, and I don't think that's what Obama had in mind. However, this is a glaring example of why meddling in matters by bureaucrats with limited or no industry experience is a bad idea. Donald Trump seems to agree, having vowed to stop the progress of this legislation in its tracks. The system is not perfect, but the "Fiduciary Rule" will create more problems for investors than it solves.