The U.S. Department of Labor’s fiduciary standard is at least a step in the right direction, said panelists at the 2016 Morningstar Investment Conference in Chicago, but it might come with unintended consequences.

Speaking on Monday, Don Phillips, Morningstar’s managing director, said the threat of lawsuits could have a chilling effect  on advisors’ investment decisions.

“I worry that this makes the industry play defense more than offense,” Phillips said. “The safe (investment) choice is the low-cost index fund, and portfolios start to look simpler, which is good because you’ll eliminate egregious behavior, but you make money in investing by not following the crowd. You have to stick your neck out.”

Phillips said the additional liability would cause some advisors to leave the industry entirely.

“Why aren’t advisors treated seriously like doctors, accountants or lawyers? It’s the consequences,” said Phillips. “Look at physicians and surgeons, many people are exiting the business because so many lawyers are out there looking for someone to blame… there will be advisors who retire early because they don’t want to put up with the wall of litigation.”

Bill Berstein, co-founder of Efficient Frontier Advisors, said that reigning in advisor’s investment methods could have positive consequences, as more assets would end up in low-cost index funds.

“If everybody owns the market at a cost of 5 basis points per year, 95 percent of investors would be better off than they are today,” Bernstein said.

Panelist Blair DuQuesnay principal and CIO of 30 North Investments, said the rule fails to clarify the confusing “alphabet soup” of titles and credentials within the financial industry. “It’s almost impossible for a layperson to distinguish between advice and sales. It would be nice to see the industry unite and create a credential.”

In April, the DOL released the rule’s final language, which binds any advice provided to retirement plan participants and IRA holders to a best-interest standard.

In the end, it falls short of protecting the average consumer, argued DuQuesnay.

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