“Am I operating in the best interests of my client?” That is the No. 1 question advisors want a legal answer for so they can determine whether they meet standards set under the Department of Labor’s new fiduciary rule, say LPL Financial senior executives.

And there is no easy answer.

Mimi Block, LPL’s executive vice president for client insights and engagement, led  a discussion on the topic at LPL’s annual advisor conference this week in San Diego. The panel considered ways to reduce conflicts of interest when it comes to serving clients. Block says the DOL will be looking for transparency and reasonable compensation, among other vague mandates, when it comes to enforcing the new rule. The rule becomes effective April 10, 2017, and advisors must be in full compliance by January 1, 2018.

Which is why the second-most common question from advisors is, “What about lawsuits?”

LPL is bracing for the significant rule change and is rejiggering product mixes and compensation charts to fall in line with what it expects will be a new regulatory landscape, says Rob Pettman, LPL's executive vice president of product management, investment and planning solutions.   

Indeed, Block notes that a regulatory change such as the fiduciary standard comes along just once every 10 years.  

The DOL passed in April its final rule expanding the “investment advice fiduciary” definition under the Employee Retirement Income Security Act of 1974 (ERISA). The rule significantly expands the circumstances in which broker-dealers, investment advisors, insurance agents, retirement plan consultants and other intermediaries are treated as fiduciaries to ERISA plans and individual retirement accounts.

As a result, LPL is phasing out new, direct ownership brokerage accounts. Instead the 30-year-old, Boston-based financial services company is ramping up advisory products, which puts advisors a further step away from securities trading. Hence the rise of robo-advisor solutions. LPL is launching over the coming months a robo program with a $5,000 minimum that includes BlackRock funds.

To be sure, all sorts of new products, compensation changes and disallowances are in the works. The fiduciary standard is complex and advisors are urged to participate in educational workshops, webinars and call-ins.

Myriad changes are still underway, Peggy Ho, executive vice president and head of government relations at LPL said.