On April 6, 2016, the same day the U.S. Department of Labor issued its new fiduciary rule, the White House set forth the reasons for and implications of it, including the following:
In the spring of 2016, the Department of Labor and the White House announced dramatic changes in the obligations of brokers in retirement accounts. A month before the April 2016 announcement, at SIFMA's 2016 Compliance & Legal Society Annual Seminar, the soon-to-be-announced Department of Labor fiduciary rule for retirement accounts was the subject of much conversation and analysis.
A fiduciary duty means that when a broker makes a recommendation to the customer, the broker's motivation must be in the customer's "best interest". For most brokers, that is their motivation. Where it is not, trouble can ensue. The extent to which such a duty continues after the purchase of a recommended security has resulted in decades of court decisions.