Fiduciary duty finally hits mainstream — and Main Street

For most of the last six years, the battle over a Labor Department rule to raise investment advice standards for retirement accounts has been waged inside the Beltway in Washington. Attacking and defending the rule has taken place in the capital's hearing rooms, conference rooms and backrooms — although they're no longer smoked-filled. Even when President Barack Obama elevated the issue with his personal involvement early last year, it was still a matter that consumed regulators and the industry — not the public. But Sunday night may have marked a turning point in getting the topic in front of the people who both proponents and opponents say they are trying to help: investors. In his HBO show “Last Week Tonight,” John Oliver, a satirist and former regular on Comedy Central, devoted a whole segment to the DOL fiduciary rule. Shortly after seeing graphic violence on “Game of Thrones,” the channel's viewers got a glimpse of an issue that has been causing much bloodshed in the policy arena. (More: John Oliver lambasts U.S. retirement savings system, supports DOL fiduciary rule) In his mordant manner that often goes viral, Mr. Oliver explained the regulation using the same talking points that DOL officials use to promote it. But unlike a Washington deputy assistant secretary, he made the audience laugh while he eviscerated the insurance and brokerage industries. “When a comedian in a popular program spends five minutes discussing [the rule], it shows it has hit the popular mainstream,” said Duane Thompson, senior policy analyst for Fi360, a fiduciary training firm. The spotlight of Mr. Oliver's show is the latest indication that awareness of fiduciary duty may finally be reaching Main Street. A recent New York Times editorial criticized industry lawsuits against the rule, asserting that they are trying to preserve the “$17 billion a year in excessive fees and inflated commissions” it said are hurting investors. That figure itself has gone mainstream after first being cited in a White House study in early 2015. (More: Everything you need to know about the DOL fiduciary rule as it develops) Rep. Tammy Duckworth, D-Ill., wrote an op-ed supporting the DOL rule in this weekend's New York Times. She highlighted the example of constituents who have been hurt by conflicted advice in a piece headlined “Isn't honesty the best policy?” It's likely Ms. Duckworth will bring up the rule on the campaign trail in her Senate race against vulnerable incumbent Republican Mark Kirk. It could appear in television commercials in several campaigns — potentially inspiring dinner table conversation in several spots around the country. If you think the New York Times is too rarefied a plane in which to argue that fiduciary is going mainstream, then look at evidence in regional papers, such as the Minneapolis Star Tribune this past weekend, which included a column titled “Why your financial adviser needs to be held to highest standard.” The piece ends with this call to action: “If you plan on using an adviser, ask them: 'Are you held to the fiduciary standard?'” It's the proponents of the rule who benefit from the punchy arguments that sound like common sense. The industry has the unenviable task of fighting a rule that sets a best-interests standard. Doesn't everyone want advice that's in their best interests? “The DOL has a consumer-protection slant, and that always has appeal … [in] the court of public opinion,” said Charles Field, a partner at Sanford Heisler. That court will be in session throughout local communities if comedians and politicians keep trying their cases before the investing public.