Third, the rule in no way mandates the use of any particular products. The speakers I mentioned suggested that 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. The difference between 60/40 and 50/50 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 it’s 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, practices in Melbourne, Fla. You can reach him at

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