President Trump may kill the Department of Labor’s fiduciary rule in formal terms, but the public wrangling has enshrined it in practice, according to two champions of the regulation.

PagnatoKarp CEO Paul Pagnato and Confiance CEO Pamela Sandy use the analogy of a train that has already left the station despite attempts to slow or stop it. The influential advisers and advocates spoke this week in the latest exclusive Financial Planning webinar.

Pagnato, a member of the chairman’s council at the Institute for the Fiduciary Standard, and Sandy, the chair of FPA, also shed light on how fees and perks such as Super Bowl tickets are changing in the free, hour-long session called “best fiduciary practices for advisers.” Market forces outweigh the rule’s likely delay or repeal, they argue.

“We may have a pause with the DoL rule, but if we are going to be profitable businesses and profitable planners in the future, we have to understand the environment we’re moving toward,” says Sandy, the founder of the Cleveland-based boutique advisory firm.

“Being a fiduciary to your client is really a great place to start,” she adds, “and it’s going to raise you up to the top of the heap as someone that a client might choose.”

The rule’s uncertain fate has left companies scrambling after having invested time and money on complying with it. Some firms have echoed Pagnato and Sandy’s view, while others, like Merrill Lynch, have said they will adjust their plans in light of the administration’s actions.

Yet American investors will “vote with their pocketbooks” for fiduciary principles and against conflicts of interest, according to Pagnato, a 19-year Merrill veteran and former HighTower partner. The publicity and news coverage on the rule has raised clients’ awareness, he says.

Pagnato noted that his Reston, Virginia, firm’s fees dropped by 25% when it changed from a hybrid broker-dealer office to “pure fiduciaries” as a full RIA about a year ago.

“That’s a pretty big haircut,” Pagnato says. “For some people, that’s lifestyle adjustment.”

The compensation his company cut out includes commissions on investments in mutual funds, IPOs and secondary offerings, as well as soft-dollar arrangements and gifts from asset managers and custodians, he says.

“We received Super Bowl tickets, dinners, flights, you name it,” Pagnato says. “All that is being cleaned up and stopped. And I just want you to know, our belief system is that if we’re taking on those things, we’re being paid, we’re receiving these things, it blurs our judgment.”

The possible conflicts don’t end when a company makes the change to a fiduciary approach. One custodian has offered Pagnato’s RIA more than $7 million to take over its clients’ accounts, a payout he says he would never agree to take as a fiduciary.

Sandy, who has been an adviser for 25 years, shed light on her firm’s practices around insurance products. While she has an insurance license, she no longer sells it. Instead, Sandy works with an insurance consultant, she says.

The agent and Sandy disclose the relationship, and the consultant must recommend more than one product because Sandy is a CFP, according to Sandy. Clients choose among the consultant’s options based on “what’s best for the client, not what commission she might be earning,” Sandy says.

She agrees that the debate surrounding the rule has clients in tune with the issue, citing HBO comedian John Oliver’s full show last summer devoted to it. She counseled attendees on how to respond if a prospective client asks why it matters whether their adviser is a fiduciary.

“True professionals want the consumer to understand that, when you hire me, it is my role and my obligation to be accountable to you, transparent to you and to put your best interest ahead of mine,” Sandy says. “And so that’s simply what I would say to them.”

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