Despite the continued rumblingsout of Washington, it's clear the fiduciary fight has moved to thearena where it always should have been: the marketplace. (Photo:Shutterstock)

Remember this: Generals fail because they always believe they'refighting the last battle. Are you one of those generals? Or are youplanning for what's next?

Despite the continued rumblings out of Washington, it'sclear the fiduciary fight has moved to the arena where it alwaysshould have been: the marketplace. Granted, it was difficult torelocate it there while the public remained blissfully ignorant ofthe meaning and intent of “fiduciary.” In large part, we have thenow-vacated DOL Fiduciary Rule to thank for bringing the concept offiduciary to the broader public. Once John Oliver featured it onhis show, we passed the critical point of “public awareness.”

Related: With fiduciary rule's demise, plan sponsors shiftfocus

Face it: relying on regulators to frame (let alone enforce) themorality of fiduciary was always a bit of a gamble. There are justtoo many loopholes when it comes to regulations. For example, lookat what happened to the 2012 401(k) Mutual Fund Fee DisclosureRule. Has that provided more clarity or more confusion? Be gladwe're not in the same position with fiduciary.

Christopher Carosa, CTFA, ischief
contributing editor for FiduciaryNews.com,
a leading provider of essential news and
information, blunt commentary and practical
examples for ERISA/401(k) fiduciaries, individual
trustees and professional fiduciaries.

Let's talk about disclosure. Some continue to believe this isthe best path towards protecting consumers. Daylian Cain long agoshowed us the fallacy of relying on disclosure. His researchreveals that disclosure tends to have the opposite effect than whatis intended. It drives decision makers towardsconflicts-of-interest instead of away.

One strategy to expose this potential damage is to informinvestors about the who-what-where-why-and-how of Cain'sconclusions. Let them know the “Jedi mind trick” of disclosure.Challenge them to be prepared for it and constantly on the lookoutfor it. Treat disclosure not as a halo of innocence, but as thedevil's horn of guilt.

If there's one thing we've learned from the 2012 fee disclosurerequirement, it's that things can very easily get lost in thesauce. What does this mean in terms of fiduciary? It means material(and harmful) conflicts-of-interest can be buried in a sea ofimmaterial conflicts-of-interest. You need to create a laundry listof material conflicts-of-interest. Diane Del Guercio, JonathanReuter, Paula A. Tkac, Veronika Krepely Pool, Clemens Sialm, andIrina Stefanescu have all produced research papers detailingexactly which conflicts-of-interest do the most harm to investorreturns.

There remains, however, one piece of disclosure that rules themall.

In all formal written agreements, add a clause that declares youwill act in the capacity of a fiduciary, as defined by ERISA. This,in fact, is the only disclosure that has any actual meaning. Allother disclosures merely obfuscate.

Indicating you will act as a fiduciary automatically says youwill not engage in any material conflicts-of-interest (because theyare not in the best interest of the client). Doing it in writingsays you really mean it; you're willing to legally bind yourself tothis promise.

Adopting these strategies will give you the ammunition you needto win the fiduciary battle about to take place.

Read more:

• The media's responsibility in the fiduciarydebate
• Reverting to old fiduciary guidance raises newquestions for recommendations
• Labor, IRS extend enforcement policy on a fiduciaryrule that no longer exists