This week, the Department of Labor finally released its new fiduciary rule, which requires investment advisers to put the interests of their clients ahead of those of themselves or the firms for which they work. On the surface this sounds good, and in its final form it may end up being good (no opinion here yet, I don’t know enough about all its ramifications), but the most interesting part from my perspective was the past 12 months of back and forth between the DOL and the financial industry (the OCC was a major force in this) about the proposals to restrict or eliminate trading of options in IRA accounts, restrict educational information from brokers/trading platforms, and prevent entertainment figures like Jim Cramer, Dave Ramsey and Suze Orman from offering specific recommendations or advice to their viewers and listeners.

The most important of the above concerns for me was the restrictions on IRA accounts and the industry responded in a very big way apparently, since the final DOL rule does not affect the ability to trade options (or futures) in IRA accounts. The final rule also spares the restrictions on entertainment personalities so I guess we will continue to hear “buy-buy-buy!” screaming from the TV, so that’s a comfort. There is also still some clarity that needs to be worked out on the issue of how much options education can be offered to IRA account holders by their brokers.

I don’t know if the financial industry won out on this issue because of the sheer weight of the groundswell, or because they were actually able to convince the DOL that many IRA account holders utilize options to reduce risk (covered calls, etc). From what I understand it is a bit of a surprise they ended up completely leaving this issue alone so either way score a victory for the industry in defending something worth defending. However it happened, I believe it ends up being a good thing for retirement account investors.

Some articles:

http://www.businesswire.com/news/home/20160406006592/en/OCC-Gratified-DOL-Fiduciary-Rule-Benefit-Users

http://www.reuters.com/article/us-usa-brokers-fiduciary-options-idUSKCN0X427F

Wall Street Dodged a Bullet on the Retirement Fiduciary Rule

There is also an article that summarizes the issue nicely on Barrons.com if you have access.