Key quote:
Ostensibly, the DOL wants to expand the ranks of fiduciaries to ensure that financial institutions avoid any potential conflicts of interest that might influence investment recommendations. Admittedly, this sounds appealing. A fiduciary standard is the highest and best the law allows, similar to what is imposed on trustees and guardians. The trouble is that fiduciary status triggers a little-known IRS regulation, making it nearly impossible for broker-dealers to handle IRAs held by average investors. These firms cannot satisfy the labyrinth of rules unleashed by fiduciary status except by (1) curtailing investment advice or (2) forcing IRAs into “advisory accounts” overseen by a registered investment advisor.
