Generally, fiduciary advisers cannot recommend an investment that could affect their compensation. The regulators believe compensation, like commissions, and 12b-1 fees paid by mutual funds can inappropriately affect the adviser’s judgment in making recommendations.
With the final fiduciary rule, the DOL prohibits firms from using quotas, bonuses, or contests to compensate advisers. Acceptable pay models include:
• Flat fees
• Compensation based on a percentage of assets