Retirement saver fiduciary rule has died — for the second time

A rule aimed at increasing investment advice protection for retirement savers has been struck down in court, for the second time.

Some legal experts said this outcome could lead unwary retirement investors to receive investment advice that is not in their best interest and create confusion about the legal duties that brokers, insurance agents and other financial intermediaries owe retail investors.

The rollback of the so-called “safety” rule issued by the Biden-era Labor Department is a form of déjà vu, echoing the outcome of a similar rule issued by the Obama administration nearly a decade ago, retirement law experts say.

The Biden and Obama rules sought to eliminate conflicts of interest among brokers, advisors, insurance agents and others by creating a higher legal bar for their recommendations to retirement investors.

But Democrats’ rules ultimately foundered after the Trump administration — in its first and second terms, respectively — refused to defend them following losses in court battles waged by financial companies.

“There’s something really familiar about what’s going on here,” Andrew Oringer, partner and general counsel at Wagner Law Group, said of the series of events.

According to the report, approximately 6 million people transferred a total of nearly $700 billion to IRAs in 2022. latest data From the Internal Revenue Service. Those numbers are up significantly from just five years ago: Nearly 4.7 million people transferred $478 billion into IRAs in 2017, according to IRS data.

However, until the Obama-era Department of Labor Published the trust rule in 2016Brokers largely only need to meet the “suitability” requirement — a lower legal hurdle — to be recommended for transfer, experts said.

Essentially, an investment recommendation had to be suitable, if not the best, for the investor based on factors such as the person’s income, risk tolerance, and investment goals.

The regulation and the subsequent Biden rule in 2024 were intended to raise transfer standards and other aspects of financial advice to retirement savers.

Biden and Obama’s trust rules have a long and complicated legal history. Each was challenged by financial industry groups that oppose the regulation.

U.S. Court of Appeals Fifth Circuit Ultimately, the Obama-era rule was abandoned in 2018. The Trump administration refused to defend this rule further and effectively eliminated it.

The Biden administration appealed this decision, but the appeals court Dismissed the case in November 2025 After the Trump administration rejected his appeal. Experts said that Texas district courts, in separate decisions in March 2026, decided to annul the regulation because neither party defended it.

Insurance industry groups that are plaintiffs in the case cheered the result In a victory for consumers, he called the Biden-era rule a “legally flawed” regulation that “exceeds the Department’s authority.”

“The challenged regulation inadvertently sought to impose ERISA fiduciary status on securities brokers and insurance agents in the absence of a relationship of trust and confidence,” Daniel Aronowitz, assistant secretary of labor for employee benefits security, said in a statement. he said.

“The Securities and Exchange Commission and state regulators regulate the activities of securities brokers and insurance agents and will continue to do so,” Aronowitz said. he said.

Now, the old five-part test to determine confidence status restoredThe Trump administration said this on March 18, after the court battles ended.

“We’re really back to the status quo,” said Oringer of Wagner Law Group.

He said the pendulum had “swung back” in favor of the financial sector with the end of the fiduciary rule. But he said it was unclear to what extent or how quickly financial companies would unwind the strengthened processes they had put in place for retirement investment advice.

From a practical perspective, without a fiduciary rule applying to rollovers, it would be difficult for individual investors to know what quality advice their broker or agent is relying on, said Reish of the Ferenczy Benefits Law Center.

That’s because, in the absence of a DOL fiduciary rule, each broker has different regulatory regimes regarding transfers, he said.

“[That] makes it nearly impossible for typical [401(k)] “The participant needs to know what the standard is,” he said.

Reish said legal standards for advice range widely. Registered investment advisors generally have a higher regulatory hurdle than insurance agents, he said.

Of course, this does not mean that all, or even most, financial intermediaries are inherently bad.

But he said the regulatory environment places a greater burden on retirement savers to remain vigilant.

“If you have a good advisor, that’s good for you: They will take care of you,” Reish said.

An agent who doesn’t have your best interests at heart is likely someone who refuses to disclose their compensation and isn’t transparent about their services or how they get paid, Reish said. In this case, he said, investors should “run away and not even think about it.”

“Evacuated [Labor Department] The rule reinforces an uncomfortable truth: Not all retirement advice is regulated the same,” wrote Ben Rizzuto, a certified financial planner and wealth strategist at Janus Henderson Investors. final analysis.

“Two advisors may offer similar transfer guidance under very different legal standards depending on licensing, compensation, and relationship structure,” he wrote, “The burden for investors often falls on trust, transparency, and understanding, not regulatory uniformity.”

Have your broker, advisor or agent disclose their compensation — how much they make, where they come from and what services they will provide you in the future, Reish said. Good advisors are completely transparent about these details, he said.

Get these details in writing if possible, he said; If you cannot, take notes of your speech.

Be wary of those who try to claim that a financial product or advice is free, Reish said. For example, insurance agents may say that the insurance company pays the commission, not the customer; This may be true in real terms, but it is not true in practice because the money ultimately comes from the investor’s assets, he said.

“If someone tells you it’s free, run because nothing is free,” he said.