"This rule is a huge benefit to the public," he added.
There has been opposition, however.
"Affordable, objective financial advice is a critical component to hardworking Americans' ability to save for a dignified retirement," said Dale Brown, CEO of the Financial Services Institute in a prepared statement.
"The Department of Labor's two earlier proposals were complex and unworkable," he added. "As we have said since day one, there is no compelling evidence this rule is necessary to achieve a uniform fiduciary standard, and DOL's own analysis fails to make the case. We will spend the coming days thoroughly analyzing this rule to determine if it protects Main Street investors by preserving their access to affordable, objective financial advice delivered by their chosen financial advisor."
The rule, however, remains a mystery to most individual investors. Surveys regularly indicate that few investors understand the concept of fiduciary obligation, and most believe their advisors are already required to act in their best interests.
Investors need to keep in mind that this new rule covers only tax-advantaged retirement accounts and does not apply to most other investments. However, industry observers believe it could lead to more sweeping changes in the years ahead across the financial services industry. To that point, it could make it difficult for some smaller advisory firms to do business and perhaps encourage a further consolidation into larger companies better able to handle the detailed rules of compliance.