What's next for you and the investor protection rule

The ultimate fate of the long-awaited investor protection rule may be unclear, but one thing investors can count on is that they'll have to be more vigilant when it comes to their retirement nest eggs.

On Feb. 3, President Donald Trump issued a presidential memorandum that instructed the Department of Labor to undertake an economic and legal review of the so-called fiduciary rule, which was years in the making.

This regulation, scheduled for implementation on April 10, requires financial advisors to provide investors with guidance that's in their best interest. The rule covers individual retirement accounts, as well as rollovers out of company-sponsored 401(k) plans.

Though the president's memorandum didn't contain explicit directions to delay the implementation, legal experts suggest such a postponement may be in the cards — but it's anyone's guess. Don't forget that the Trump administration hasn't yet gotten Senate confirmation for its Labor secretary nominee, Andrew Puzder.

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"We're two months out from the applicability date," said Tess Ferrera, a partner at Schiff Hardin in Washington, D.C. "It seems the most likely possibility is that they attempt to delay the rule before April 10 in some manner."

The Labor Department, meanwhile, is "considering options to delay the applicability date" of the rule, according to a statement from acting Labor Secretary Ed Hugler.

Nevertheless, you should still be on your guard over your investments and the people who oversee them.

Consumer protections

Even if the DOL doesn't pursue those who violate the rule starting on April 10, jilted investors still have options.

Participants in retirement plans have already been suing their employers and others, alleging fiduciary breach and excessive fees.

IRA accounts held at broker-dealers, meanwhile, offer arbitration as a form of recourse, but this can be a costly procedure.

"You can also sue under state law if someone steals your IRA money or invests it imprudently," said Marcia Wagner, managing director of the Wagner Law Group in Boston.

The genie is out

Regardless of how the administration proceeds with the regulation, savers need to ask advisors the right questions.

"Things could go back to where they before, but they do so after the genie is out of the bottle," Wagner said. "Most consumers should be aware there are significant conflicts in the industry, and lessons learned cannot be unlearned."

Here are some key questions.

• Are you a fiduciary? Find out immediately if your advisor is acting in your best interest. Get the point across with this fiduciary oath from the Committee for the Fiduciary Standard.
  
  
• How are you paid for your services? Ask whether you're paying a fee for your advisor's help, be it hourly, as part of a subscription or based on assets he or she manages for you. Find out whether your advisor receives a commission for the sale of mutual funds, insurance and annuities.
  
  
• Where do you keep your assets? Some large broker-dealer firms will hold your assets in custody because you have a brokerage account with them. If you're using an independent fee-only advisor, he or she will likely hold your assets at a custodian, such as TD Ameritrade, Charles Schwab or Fidelity. Be sure to match the statements you get from your custodian and the statements your advisor provides you.
  
  
• What are your qualifications? There's an alphabet soup of different designations for financial advisors, but keep an eye out for the best-known credentials: Certified Financial Planner, Chartered Financial Analyst and Certified Public Accountant. All of those require study and practical experience to achieve them.

(This story has been updated to correct the spelling of Tess Ferrera's name.)