Like most people who work in the financial services arena, I hastily downloaded the long anticipated “Fiduciary Rule” when it was released by the U.S. Department of Labor (“DOL”) on April 6, 2016 and am busy tackling this final version. With more than two hundred pages, it’s going to take longer than a lunch break but is nevertheless vital reading. DOL’s Fact Sheet is a good start. No doubt there will be a flurry of articles and webinars about details and implications. I am attending two events early this week alone.

As with any new regulation, a cadre of professionals will be involved to discuss how best to comply. Ideally, an organization will coalesce its brain trust from Legal, Operations, Sales, Public Relations and Accounting at a minimum. In deference to industry concerns about how long it would take to make necessary changes, implementation will be phased in with a final adherence date of January 1, 2018. Other sought after modifications survived and are expected to make it easier for financial service firms to inform their clients in the aggregate about regulatory mandates.

The elephant in the room is the uncertainty about how post-mandate behavior could veer from the goals of the regulators and who might get hurt as a result. Free market economists refer to the Law of Unintended Consequences when they decry an event that distorts the invisible hand that optimizes demand and supply. Realists will counter that the financial services industry is already regulated and therefore does not operate on the basis of unfettered buy and sell signals. Nevertheless, history has repeated itself many times, demonstrating the acuity of those in search of profitable loopholes.

According to “Beware the Fiduciary Rule’s Unintended Consequences” by Christopher Robbins (Financial Advisor Magazine, April 6, 2016), many industry executives expect smaller firms to wither away “when some of their revenue streams dry up.” A related view is that tiny client accounts will be jettisoned by the remaining service providers and left with few choices other than “computers or robots,” despite the stated purpose of this initiative being to help all retirement investors. Keep in mind that the U.S. Securities and Exchange Commission (“SEC”) seems poised to challenge whether a robo-advisor can serve as a fiduciary. If the answer is “no,” does that preclude these algorithm-based providers from serving retirement customers?

Some attorneys exclaim that this conflicts of interest mandate will open the door wide to added ERISA lawsuits. In “Why Plaintiff Firms Will Love DOL’s New Fiduciary Rules,” Skadden Arps partner Seth Schwartz is quoted as saying that “As night follows the day, there will be more litigation.” In “Fiduciary Rule Less Complex, but Questions Linger,” reporter Sean Forbes (Pension & Benefits Daily, April 7, 2016) interviews a handful of attorneys who express concerns about (a) private rights of action to bring a lawsuit (b) a definition of a fiduciary that “goes way beyond common law” and (c) questions about the enforceability of the Best Interest Contract Exemption (“BICE”).

One big upside of the Fiduciary Rule is that the topic of fiduciary duty is being mainstreamed as never before. Transparency can be a good thing as long as investors pay attention.

Not everyone is convinced that more information will translate into better decisions made at the individual level. During a quick call last week with an in-house benefits attorney, I got his message loud and clear. An employer can only do so much if a participant remains reluctant or unable to engage. Wall Street Journal pundit Jason Zweig echoed this view in his April 8, 2016 column entitled “You Are Responsible For Your Retirement Savings.” His central point is that the DOL Fiduciary Rule is not a panacea that can fully eliminate investment product risk or prevent an individual from working with an ethics-challenged advisor or broker.

Stay tuned for subsequent posts about the DOL Fiduciary Rule.