Every day in 2016, I saw an article in our trade press speculating on what the Department Of Labor’s final rule would look like. Finally, the wait is over and the rule is in place. Speculation about the rule, however, has not ceased. It has merely redirected its focus.

The most popular topic seems to be what challenges to the rule may be launched. There are plenty of suggestions that various industry groups may sue, on what grounds they will try to stop or alter the rule and the odds of these efforts succeeding.

Then, of course, there is the pontificating of how the rule will fare once our new president takes office. Unsurprisingly, some in Congress have already proposed legislation that would put a halt to the DOL’s implementation though most observers believe the measures have no chance of passing under the current administration.

A whole other genre of speculation regarding the rule surrounds the question, “What will advisors have to do now?” Recently, I was subjected to a slew of theories about this as I spoke at a couple of conferences within a few weeks of the announcement of the new rule by the DOL.

I heard a talk about innovations in long-term-care insurance. It was actually quite encouraging. The last several years, fewer and fewer options have been available, and it is nice to see new products coming to market. Insurance isn’t the answer for everyone, of course, but the more options we have as advisors, the more likely we can fill a client need.

Then the speaker said, “Look people. With the DOL rule, if you aren’t recommending LTC policies, you are asking for trouble.”

I thought that a bit odd. The DOL rule applies to the advice, or lack thereof, applied to retirement accounts and IRAs. LTC issues are handled under completely different standards, regulations and jurisdictions.

I expect product-sponsored speakers to extol the virtues of their product, so I didn’t take much from the comment other than he had shifted from educator to promoter. He lost some credibility with me for that shift, but I was happy for the good information he had shared and only rolled my eyes a little bit.

A day later, I sat in on a program about retirement income delivered by an academic who is a fan of immediate annuities. That is fairly common in the academic community. The presentation was sound and all was well.

Then the speaker said, “I can’t emphasize enough that the DOL will be looking at this under its new rule. If you aren’t recommending immediate annuities, you are going to have issues.”

At the next conference, I was listening to a speaker about reverse mortgages and yep, you guessed it. Apparently, if we aren’t recommending setting up a reverse mortgage line of credit at the very least, the DOL will be after us. By this time, the eye roll was substantial.

In just about every session, the DOL rule was cited as a reason to do some things and not do others. In a couple of the talks, the speakers scared the audience so badly, I thought a couple of people might be drafting their resignation letters on their tablets in the lobby right after the sessions. 

Don’t let speakers, home office people or industry lobby groups work you into a frenzy. If you are getting uptight about this, please, take a deep breath and try to relax. It won’t be that onerous for a lot of readers of Financial Advisor.

Surely, there are some potential pain points. If you intend to rely on the full Best Interest Contract Exemption (BICE) to accommodate commission income for instance, there is some work to do. It seems reasonable to me that your home office will gripe about the BICE, but the type of mandates and doom I described from the recent conferences really should not be a source of great stress.

Here are a couple of things to keep in mind about the DOL and fiduciary responsibility. 

First, cost is a consideration, not the central issue. In the case in which a client will be paying more by working with you than they did when not working with you, that is NOT in and of itself a breach of the rule or a violation of fiduciary duty.

This is easily confusing since so much of the academic arguments for the rule were based on costs. Fiduciary precedent is clear that all other things being equal, additional costs, especially if they are your pockets, could be a problem. But in the case of working with you versus without you, all things are not equal.

The DOL rule calls for reasonable compensation. Your time, expertise, and potential liability are all things to be compensated. Lawyers are fiduciaries and as we all know, they get paid. Many get paid very well. A high-priced attorney does not fail to meet their fiduciary duty because they charged more than another lawyer, and the cheapest lawyer isn’t automatically deemed to have met his or her fiduciary duties just because they charge less.

Second, losing a case is NOT in and of itself a failure of a lawyer to meet their fiduciary duties. The lawyer is judged based on their conduct. How did he behave? Did he follow a sound process with adequate diligence?

It will be similar for financial advisors. If you have a decent process and follow it adequately, you are not expected to forecast or time the market. When markets dive, complaints rise. That has happened forever and is not some new condition brought about by the DOL rule. If anything, the DOL rule can help you if you take it to heart, implement good procedures and put the client first. 

Third, the rule in no way mandates the use of any particular products. The speakers I mentioned suggested “not recommending” a particular product was a violation. That assertion is rubbish.

Fourth, neither the DOL nor an army of private sector lawyers are licking their chops to come after you for failing to dot an i or cross a t. The DOL’s priority in establishing this rule is to try to reduce the effect on the public of some compensation schemes and curtail some egregious sales behavior.

Don’t get me wrong i’s need to be dotted and t’s need to be crossed and yes, I know, I know — in America, you don’t necessarily need a good case to sue, you just need a willing lawyer. Nonetheless, I do not see a lot of lawyers lining up to go after someone because they recommended a 401(k) be rolled into a run of the mill 60/40 portfolio instead of a 50/50 allocation.

The greed often attached to the legal profession is actually something that prevents super picky, technicality-based complaints from getting very far. The lawyer wants to get paid and to do that he needs clients that have suffered real harm. The greater the harm, the greater the chance of being compensated. A 60/40 vs 50/50 difference doesn’t cause great harm. Putting a chunk of those funds into something highly speculative might. Basing the recommendation on little more than your whim might. Here again, this is how it has always been and not a new condition stemming from the DOL rule.

I’m not trying to minimize the impact of the rule. It will be significant in the aggregate and advisors of all types will need to adjust. How big an adjustment will depend on your current business practices. But here is the rub. What is expected from the rule is in large part what makes for good business practices anyway. If you already use a process that puts the client’s interest first, documents your recommendations well, makes transparent your reasonable compensation, avoids conflicts of interest and manages unavoidable conflicts in the client’s favor, it won’t be difficult because it is not that different.

Dan Moisand, CFP, has been featured as one of America’s top independent financial advisors by Financial Planning, Financial Advisor, Investment Advisor, Investment News, Journal of Financial Planning, Accounting Today, Research, Wealth Manager and Worth magazines. He practices in Melbourne, Fla. You can reach him at www.moisandfitzgerald.com.