Read: More coverage of the DOL fiduciary rule

"They've taken an overarching, expansive and unwieldy proposal and scaled it back to a regulation that industry is going to be able to work with," said Sweeney, who served in the DOL's fiduciary division from 2003 to 2007.

"The huge tsunami that everyone thought was on the radar has fizzled out into a ripple in a whirlpool," she added.

DOL critics feared the proposed rule would ban proprietary products, but new provisions in the final rule's Best Interest Contract Exemption clarify how firms and advisors can sell proprietary products, so long as those options remain in investors' best interest.

In a press conference this week, Perez underscored the rule's latitude for proprietary investments, saying "they have an important place in the market."

The final rule also addresses the question of commission-based sales and revenue sharing with more lenient language. The new version of the BIC exemption says brokers and service providers can continue to receive "common forms" of compensation, so long as the charges are reasonable, fully discloses, and the investments in the client's best interest, according to a DOL fact sheet.

That language is likely to address critics' claims that the proposal's preference for fee-based compensation models would end up costing investors of modest means more money.

The rule also says advisors can present the best interest contract to clients along with the other paper work issued when opening an account, a more forgiving provision than some expected.

 Sweeney says the rule's outcome is a bit "ho hum."

"It boils down to one more piece of disclosure in an already heavily regulated industry," she said. "Ultimately, the market will adjust to it."

Actively managed investments spared

As proposed, the rule was expected to significantly handicap more expensive actively managed investments, and accelerate the exodus of assets to cheaper index funds and ETFs.

For investment management firms such as Russell Investments, a safe harbor for low-cost investments was perhaps the most problematic aspect of the proposed version of the rule.

But that provision was stripped from the final rule. "We were concerned that would have created a race to the bottom, and regulatory arbitrage which would have had DOL steering investors to only low-cost products," said Jean-David Larson, director of regulatory and strategic initiatives at Russell Investments.

That proposed safe harbor would have been in direct contrast with the fiduciary standard defined in ERISA, which expressly says prudent investments are not necessarily the cheapest.

Larson said all indications are that the DOL coordinated with the Securities and Exchange Commission and other regulatory agencies in creating a principles-based rule that does not favor one set of investment products over another.

"I believed all along that DOL had a mandate, and genuinely wanted to help improve the market," said Larson. "With their proposal, they sincerely wanted industry's feedback to build something better."

Any regulation of this magnitude will be disruptive, said Larson, as brokers and advisors will likely have to narrow product offerings for smaller accounts.

But in allowing a level playing field for active and passive investments, the DOL may have actually created an opening for some actively managed products, even for smaller accounts in retail channels, thinks Larson.

Specifically, brokers and advisors may find target-date funds for all investors, small or large, could satisfy the need to balance tactical strategies while catering to clients' best interests.

"The rule will change how clients are advised and force advisors to better understand their needs," said Larson.

Questions remain for Chamber of Commerce

The Chamber of Commerce's Center for Capital Markets Competitiveness was a forceful critic of DOL's proposal and its potential impact on small business' ability to provide workplace retirement plans.

The proposed rule's seller's carve-out said advisors to plans with 100 participants or fewer or less than $100 million in assets would be held to a higher fiduciary standard and extensive new disclosure requirements.

In exempting advisors of plans above those thresholds, the proposal effectively created an unfair disadvantage that would drive costs up for sponsors of small plans, potentially forcing some out of the 401(k) market, and dissuading other small businesses from sponsoring plans, argued the Chamber.

The final rule amended that provision. Now, the new requirements will be for advisors to plans with $50 million in assets or less.

That does small businesses and their advisors no favors, according to the Chamber's take on the final rule.

In fact, by stripping the 100-participant threshold, the provision stands to impact more businesses than it otherwise would have, said Brad Campbell, an ERISA attorney at Drinker Biddle & Reath, in a press call.

"It's a significant change," said Campbell, who thinks all plans should be operating under the same rules.

Now, an employer with as many as 1,000 plan participants will be impacted, assuming the average account balance is $45,000.

"Access to advisors is key for small businesses. This means more businesses will face more strenuous regulations, and more advisors will face uncertain litigation risk," he added. "That will increase the cost of advice and make it more difficult for businesses to offer plans."

The final rule extends the implementation deadline by four months, but Campbell said that is still not enough time for advisors and providers to adequately comply.

"Other less complicated regulations have been given more time for implementation," he said

David Hirschmann, CEO of the Center for Capital Markets Competitiveness, acknowledged DOL's final rule is improved in some areas, but said in its rush to finalize a rule, "the DOL has made things worse for small businesses."

Hirschmann said the Chamber is still weighing legal options.

Did DOL concede too much?

At least one leading advocate for the fiduciary standard was hoping for a more forceful final rule.

"DOL and Phyllis Borzi moved heaven and earth to do the right thing," said Knut Rostad, president of the Institute for Fiduciary Standard.

"But this became a completely political process between the Administration and Congress," he said.

Parts of the BIC exemption are brilliant, he said, but other parts "can not be overlooked."

"Firms are given great latitude in determining what is in the customer's best interest," said Rostad. "This is not about being perfect, but is about whether we made a step forward to ensure investors that the advice they get is non conflicted."

Rostad was hoping to see language saying that this regulation is part of process, and that more work needs to be done.

Ultimately, the rule's effectiveness will come down to the question of enforcement, thinks Rostad.

"It's a big question mark. There seems to be an unstated assumption that enforcement is going to be effective, but I don't know if that is merited," he said.

Until the largest providers show concrete evidence that they are willing to make the changes investors need, doubts about the rule will remain, said Rostad.

"I don't know that we have seen those yet," he added.