Unless you’re in the financial advisory business or some related field, it’s unlikely that “fiduciary” is a word you use regularly.

But if you own a business or run one, under the Department of Labor’s (DOL) new “fiduciary rule” for retirement plans, “fiduciary” has taken on a new and expanded significance in the retirement-planning space. While these new rules don’t apply until April 10, 2017, it’s important that you understand them now, so that your decisions in the months ahead will be consistent with those rules.

Prior to the new DOL fiduciary rule, financial advisors associated with a registered investment advisor (“RIA”) were considered fiduciaries, as they are bound by law when providing investment advice to always act impartially and do what’s in a client’s best interests. Advisors who only offered investment advice through a broker/dealer had a different standard of doing what’s suitable for a client. Any good ethical advisor, fiduciary or not, will always look out for his or her clients’ interests. But all advisors have not previously been bound by law to do it.

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The question is, what does this fiduciary rule mean to you, a business owner or chief executive?

With the new DOL fiduciary rule, that has changed for retirement plans. Any and all advisors working with clients on retirement accounts will be considered fiduciaries: They must act impartially and put their clients’ best interests ahead of their own, without exception.

How did this come to pass? In short, the DOL determined that advisors providing retirement investment advice to clients should all operate under a uniform standard. However, the regulations underlying the federal retirement and benefits laws, the Employee Retirement Income Security Act (ERISA), were issued more than 40 years ago. In the 1970s, professional pension managers made complex retirement investment decisions for employees.

As the DOL explains on its website, “[T]oday, workers are largely responsible for managing their own savings through 401(k) plans and IRAs, so millions of Americans rightfully turn to advisors for recommendations on how much to save and how to invest and manage their savings. But under these outdated rules… many advisors are not required to abide by what is called a ‘fiduciary standard.’”1

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So, the question is, what does this new fiduciary rule mean to you, a business owner or chief executive? First, if you offer a retirement plan to your employees, e.g., a 401(k), you have always been a fiduciary. Being an ethical businessperson, you treat your employees fairly, but with the new DOL rule, when it comes to your retirement plan, you will only be working with advisors who are themselves fiduciaries. If you are concerned about your responsibility for complying with these complex rules, the first step is to make sure your investment advisor agrees to be a fiduciary… if not now, then at least by April 2017.

Second, make sure your plan’s administrative firm is also acting as a fiduciary. ERISA permits you to appoint an administrative fiduciary to manage this part of your plan and make sure you are following the law. So, you should consider appointing an administrative fiduciary. In the industry parlance, that’s called appointing a 3(16) consultant whose job is to be sure that you are following all the retirement plan administration rules.

You can also appoint an investment advisor who will have full discretionary authority and control to make investment decisions for your plan. That’s called a 3(38) advisor. These changes can protect you from personal liability for administration and investment management in this new era of heightened responsibility.

1United States Department of Labor. FAQs: Conflicts of Interest Rulemaking–Protect Your Savings–U.S. Department of Labor.

This article was originally published in the June/July 2016 issue of Worth.