This is an ongoing series of blog posts “From the Founder” in which GuideVine CEO, Raghav Sharma, discusses trends and topics in personal finance. In this post, Raghav offers initial reactions to the Department of Labor’s newly published Fiduciary Standard Rule.

After years of discussion and an extensive review and consultation process with the financial services industry, the Department of Labor (DOL) has announced its final fiduciary rule.

The new rule will require financial advisors in a variety of settings to act in their clients’ fiduciary interests when recommending investments, rather than rely on the less stringent “suitability” standard previously governing brokers.

This is good news for the average investor because it promotes transparency and makes it easier for investors to evaluate the advice they’re being offered. While some may argue that the new rule gives investors fewer choices, I believe (as do many of my fiduciary peers) that the choices will constitute a better selection of investment products. It also avoided “double commissions” by not requiring investors to move products they have already paid commissions on into a fee-based account, unless it’s in their best interest to do so.

The DOL has also shown flexibility in listening to the public and financial industry by incorporating a variety of changes without gutting the regulation. For instance, the rule clarified that the fiduciary relationship between an advisor and client begins when an engagement contract is signed and not during any informal conversations prior to that point. The DOL also extended the timeline for implementation to 12 months (from 8 months) to give the industry time to make the necessary changes to their processes.

Challenges and opportunities ahead

The new fiduciary rule may pose challenges for some financial service businesses that only rely on the suitability standard, but I believe industry participants will innovate to continue to serve their clients as well as their clients’ best interests.

It’s too early to say whether the new rule will actually lead to higher prices for financial advice, thus making it less accessible for the average investor. As we have seen in the past, the financial industry has found ways to democratize many of the products and services that were once only available to the wealthiest investors. More recently, we have seen an acceleration of innovation in financial technology and tools that offer the advisory profession new, cost-effective ways to deliver the same (and more) client benefits.

At GuideVine, we work with some of the top financial advisors in the country by helping them build a stronger digital marketing presence, to expand their visibility and build deeper relationships with current and prospective clients. All of our advisors are required to be fiduciaries and many of them are embracing the new shift in consumer preferences and expectations.

Looking forward, we can be certain of the following two things: the financial industry will continue to evolve and the need for financial experts to help people achieve their goals will be a consistent theme.


Raghav Sharma

Raghav Sharma

Raghav is CEO and Co-founder of GuideVine. He is a reformed consultant and banker who lives in New York with his wife and two children.