Obama Fiduciary Rule A Headache for Active ETF Funds

The Department of Labor’s fiduciary rule backed by President Barack Obama’s administration in Congress could put an end to hidden fees and conflicts of interest in the investment market, potentially driving more assets out of actively managed investments and into low-cost, transparent exchange traded funds.

A controversial new regulation for investment advisors is due to arrive in April, reports Madison Marriage for the Financial Times.

The Obama administration has calculated that the new fiduciary rule, which will require money managers offering retirement advice to put their clients first, could result in $17 billion in cost savings per year for American workers and retirees.

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The new rule could deter investment advisors from recommending funds based on big commissions and encourage broker-dealers and other intermediaries to suggest alternative investment options that provide investors the best bang for their buck.