Labor Secretary Alexander Acosta’s announcement that the new fiduciary rule will go into effect June 9 as planned will dramatically impact the lives of financial advisors who deal with retirement plans, according to advisors, lawyers and consultants.

Full implementation of the rule for broker-dealers and advisors is still set for Jan. 1, but the portions effective June 9 represent a seismic shift for many advisors, who have been preparing for months, industry insiders say.

Even before it was declared valid by Acosta on Monday, the rule already has pushed firms to abandon commission products and move to fee-based advice and enact measures to promote transparency. Advisors are required under the rule to put the best interests of the client first, have impartial standards and reasonable compensation, and not make any misleading statements.

But even Acosta says in an op-ed piece in the Wall Street Journal that he is still seeking public opinion on what he calls a controversial regulation.Prof. Jamie Hopkins, co-director of the Retirement Income Program at the American College, says even the Jan 1 final implementaton could be delayed. Also between now and Jan. 1, Trump’s deregulation demands may still be met and the DOL could moe forward to try to overturn or modify the rule, Hopkins says,

Consumers will come out ahead under the rule, advisors say.

“The consumer is the one who will win under the DOL rule. Why should consumers put their savings in the hands of someone who is not looking out for their best interests?” asks Michelle Brownstein, director of private client services at Personal Capital in San Carlos, Calif., which has $4.2 billion in AUM. The problem is “when you explain the fiduciary standard that is required under the DOL rule, the client may ask why you have not been putting their best interests first all the time.”

“This is clearly in the best interests of the American people,” agrees Paul A. Pagnato, CEO and founder of PagnatoKarp, an independent wealth management firm in Reston, Va., with $3 billion in assets under advisement. “It raises advice to a new level although I’d rather see it applied to all assets, not just retirement. I expect there to be some refinement in the next few months, but every time something like this occurs the American public becomes more educated about finances.”

Advisors also may be winners with the enactment of the rule, says Mark Kemp, founder of Kemp Harvest Financial Group, a wealth management firm based in Harleysville, Pa., which has $268 million in AUM. “Now is a great opportunity for financial planners to get their house in order. They should look at how they budget and at their cash reserves, just like we tell our clients to do. The awkward part of switching from commissions is that until an advisor has enough clients on fees or a percentage of AUM, they do not have as much money coming in.”

The Securities and Exchange Commission could still enact a uniform fiduciary rule for all financial services, and many advisors would prefer that. “We feel the SEC could act this year and propose a uniform rule. It would be easier to deal with all clients in the same manner under an SEC rule, rather than carve out retirement clients for special treatment under the DOL rule,” says Todd Cipperman, managing principal of Cipperman Compliance Services in Wayne, Pa., which acts as a chief compliance office for advisors.

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