The crux of the ruling, unveiled on Wednesday, April 6, 2016, was summarized very concisely by Labor Secretary Thomas Perez when he stated that, “Today’s rule ensures putting the clients first is no longer a marketing slogan. It’s now the law."

According to the Department of Labor, the conflict of interest final rule will serve to protect investors by requiring all those who provide retirement investment advice to adhere to a fiduciary standard, that is: acting in ways that put their clients’ best interest before their own profits.

Currently, within the community of advisors and service providers who touch retirement money, only RIAs are obligated to abide by the fiduciary standard mentioned above. Meanwhile, there are licensed brokers, some insurance agents, and other quasi-advisory roles that dispense investment advice to clients without being required to act as a fiduciary on the behalf of their clients.

Put another way, the new ruling is aimed at requiring all agents who operate in the retirement investment advisory industry today to abide by the same fiduciary standards as their RIA brethren, which means putting their clients’ best interests first.

Other key takeaways from the final rule include:

• Marketing oneself or one’s services without making an investment recommendation is not fiduciary investment advice.

• Employers providing asset allocation models identifying specific investment products is not considered fiduciary advice.

• Advisors may continue to sell proprietary products so long as they adhere to the new guidelines.

• Clients may still opt out of the proposed fiduciary relationship if they so choose.

Read more about the conflict of interest rule on the DOL’s website here; see also FAQs.

Better service from their advisors. Through the passage of this ruling, the end investor will gain greater assurance that the people helping manage their hard-earned retirement savings will always be acting in their best interest.

Under the new fiduciary label, advisors will be held to higher standards than what most retirement advisors adhere to today. This will inherently shake up some commission-based advisory models as the new standard will push for cheaper alternatives that are in the clients’ best interest in lieu of their own compensation.

If there is any backlash from retirement advisors over the new ruling and some smaller accounts end up going unserviced so to say, then robo-advisory platforms like Betterment and Wealthfront, which are already RIAs, can (happily) step in to pick up the slack.

The ruling has no impact on taxable accounts.

The new ruling requires higher standards that inevitably push advisors to utilize and recommend more transparent, lower-fee investments. There is perhaps no more of a direct way to improve your client’s returns without changing their strategy than to focus on reducing expenses; and ETFs, especially passive index-based ones, are a proven tax-efficient investment vehicle capable of providing liquid exposure to just about any asset class imaginable.

As more advisors are prompted to act in their clients’ best interests, they will likely continue to embrace ETFs en masse, perhaps at an increasing pace as the preferred portfolio building blocks.

While critics will point to its loopholes, there’s no denying that the new DOL conflict of interest ruling marks a major step forward in providing better protection and service for retail investors. Only time will tell the lasting impacts of this policy and ETFs appear to be favorably positioned for any shakeups in retirement accounts. If approved by Congress, the new rule will require firms to acknowledge their fiduciary status and make any disclosures by April 2017, with a deadline of January 1, 2018.

Follow me @SBojinov