Finance in Focus: Preparing for the US Department of Labor fiduciary rule

Finance in Focus: Preparing for the US Department of Labor fiduciary rule


A new regulation is coming to the US on 10 April 2017, and it will affect wealth management advisors and investors alike. Similar changes were made in the UK three years ago, which led to 30–40 percent of advisors leaving the business. From the perspective of clients, the regulation means that investment recommendations need to be in their best interest rather than simply being suitable for them.

This regulation, the Department of Labor (DOL) Fiduciary Rule, has pros and cons that are discussed by Dr. Ron Rhoades and Abhishek Goswami, who answer several questions posed by Robert Stanich and Alex Baghdjian in this Finance in Focus podcast episode: 

  • What is a fiduciary?
  • What is the difference between an advisor and an adviser?
  • How do you make people live up to the standards of being a fiduciary?
  • How does surveillance play a part in managing the risk caused by a trader’s behavior?
  • What mindset change is needed for investors to transform from a sales-based role to a fiduciary and advisor role?
  • What have been the results since the three years in which this rule has been in effect in the UK?
  • Who should do the monitoring and surveillance?
  • Who benefits from this rule the most?
  • Are robo-advisors affected by this rule? 

Just to offer one preview, a fiduciary is an expert trusted advisor—someone who doesn’t necessarily sell products but instead acts as a purchaser’s representative. The DOL rules to be finalized in the spring of 2017 are expected to greatly expand on who can be a fiduciary.


Dr. Ron Rhoades, director, Financial Planning Program, Gordon Ford College of Business, Western Kentucky University, a frequent writer and speaker on fiduciary issues and a blogger at the Scholarly Financial Planner

Abhishek Goswami, an offering manager at IBM, is focused on the creation of repeatable solutions that transform global financial markets and the wealth management industry. At IBM, he is currently leading the work on risk and compliance offerings that address the challenging regulatory compliance and surveillance needs of financial services firms. Follow him on twitter @goswaa.


Alex Baghdjian, a senior offering associate for financial markets and wealth management at IBM, brings deep knowledge of the financial services industry, particularly financial markets and wealth management. Baghdjian’s professional experience revolves around digital wealth management, securities-based lending, mortgage processes, account opening and client segmentation strategy. In his role as a senior offering associate, he focuses on bringing IBM cognitive and analytics solutions to the financial services industry. Follow him on Twitter @AlexBaghdjian.

Rob Stanich, a global wealth management offering manager at IBM, helps Financial Markets firms radically transform their business and technology offerings. He has extensive experience leading agile teams in environments of change and complexity, discovering and unlocking business value and fostering innovation. Follow him on Twitter @RobertStanich.

IBM’s Surveillance Insight for Financial Services solution addresses the challenging regulatory compliance and surveillance needs of financial services firms. Watch this demo to see how a compliance officer in the brokerage arm of a large financial services company discovers a pump-and-dump violation by reviewing data displayed in a Surveillance Insight dashboard. 

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