In the meantime, here are some things consumers need to know when shopping for financial advice and investments.
What does the rule cover, and what is effective now?
The basic obligations of the rule are in effect, which means brokers and advisers must meet a “professional standard of care,” and they must put customers first.
The rule covers most retirement accounts, including individual retirement accounts and workplace accounts like 401(k) and some 403(b) plans. Advisers making recommendations on those accounts, and on rollovers from workplace plans into I.R.A.s, are required to charge reasonable fees, and they are not permitted to make misleading statements about investment transactions, their compensation or any conflicts of interest.
But many accounts, including 403(b) accounts for government workers like teachers and church-related plans, are not covered and are still subject to ill-advised and high-cost investments. A plain brokerage account packed with mutual funds or a 529 plan, for instance, would not be covered either.
The old rules still apply there: Brokers are only required to recommend “suitable” investments, which means the product can make the adviser more money at the customer’s expense, even if there is an option that performs identically but is less expensive.
What immediate changes can I expect with my current accounts or when opening new ones?
Advisers may recommend new or different types of mutual funds or annuities that are better for investors. For instance, new classes of mutual fund shares — including “clean shares,” which charge management fees but not distribution fees — were created in response to the rule, according to the Consumer Federation of America. Some annuities have been cleaned up, the group said, offering lower fees and shorter surrender periods — the amount of time before the funds can be withdrawn without penalties.
Critics of the rule have said that putting…