The Department of Labor has released a second series of “frequently asked questions” pertaining to its recently adopted Conflict of Interest Rule. After April 10, advisers who are paid to make recommendations about retirement accounts, such as individual retirement accounts (IRAs) and 401(k) accounts, will be treated as fiduciaries. This includes advisers who are paid both directly and indirectly through commissions or other payments received from third parties.

The new rules generally require that advisers:

Satisfy a professional standard of care when making investment recommendations;

put their customer’s interest first when making recommendations;

avoid misleading statements about conflicts of interest, fees, and investments;

follow policies and procedures designed to ensure adherence to the best interest standard and to prohibit financial incentives for advice that is not in the customer’s best interest;

charge no more than reasonable compensation for their services; and

disclose basic information about fees and conflicts of interest to retirement investors.

A sampling of questions answered in the FAQ is below.

Will the rule cause change in the financial services industry?

The rule will require many financial institutions to significantly change their compensation practices. The financial services industry will not be permitted to use incentives such as quotas, bonuses or prizes that encourage advisers to make recommendations that are not in your interest.

In many circumstances, financial advisers must provide a written statement confirming that they are fiduciaries when they offer investment advice, and must disclose additional information about conflicts of interest in any payments they get. In certain circumstances, financial advisers must agree to comply with these rules in a “Best Interest Contract.”

Will financial advisers still get paid for providing retirement investment advice? I’ve heard that some advisers will get “exemptions.” What does that mean?”

Many firms will be required to adopt policies and procedures designed to ensure that advisers provide best interest advice, prohibit misaligned financial incentives for advisers to act contrary to the client’s best interest and disclose conflicts of interest, particularly by directing the customer to a webpage disclosing the firm’s compensation arrangements and making customers aware of their right to complete information on the fees charged.

What happens to financial advisers if they provide investment advice that is not in their retirement investors’ best interest?

The rule and exemptions hold financial advisers accountable to give investment advice in their retirement investors’ best interest. If financial advisers and their firms do not follow the standards established in the rule and exemptions, retirement investors will be able to hold them legally accountable—either under the provisions of a federal law, the Employee Retirement Income Security Act, known as ERISA (for 401(k)s and other ERISA plans) or, in some cases, under a breach of contract claim (for IRAs and other non-ERISA plans).

What counts as a fiduciary “recommendation” as opposed to general investment education?

A “recommendation” is a communication that most people would think is a suggestion that they take a particular course of action, such as buying a particular security in a retirement account or not selling a particular investment. The concept of a “recommendation” is very familiar to advisers because the rule’s definition of “recommendation” is based on rules the Financial Industry Regulatory Authority has applied to brokers for many years. FINRA is the independent regulatory authority of the broker-dealer industry, subject to the oversight of the Securities and Exchange Commission.

There are reports that the Department has fined financial institutions that are not compliant with the rule and exemptions despite not having provided additional guidance that is needed for compliance purposes. Is this true?

No. The Department has not fined anyone for failures to comply with the rule or exemptions. In fact, to give firms more time to come into full compliance, the rule and exemptions adopt a “phased” implementation approach. In April 2017, one year after the rule’s publication, the broader definition of investment advice fiduciary will take effect.

To use the Best Interest Contract exemption in April 2017, firms will only be required to comply with more limited conditions, including acknowledging their fiduciary status, adhering to the best interest standard, and making basic disclosures of conflicts of interest. The exemption’s other requirements do not go into full effect until Jan. 1, 2018.

When do the rule and exemptions become applicable?

Most of the consumer protections provided under the rule and exemptions will begin on April 10, 2017. As of that date, financial advisers must provide advice in your best interest and in many circumstances give you a written statement that they are fiduciaries. Financial advisers do not have to provide the Best Interest Contract until Jan. 1, 2018.