In 2010, President Obama signed into existence a new law that was designed to protect you from conflicts of interest and to hold all members of the financial services profession accountable for their recommendations. Due to some loopholes in the rules, this still allowed some brokers and advisors to recommend products that put their own profits ahead of their clients’ best interests. This hurt millions of America’s workers and their families. Brokers and advisors were required to make “suitable” recommendations but these recommendations weren’t always in your best interests.
The hot topic in the financial world is the Department of Labor’s new fiduciary rule that makes financial advisors who give advice on retirement accounts, act as fiduciaries. A fiduciary is required to act in the best interests of their clients and put the client’s needs ahead of their own needs at all times. A fiduciary must provide disclosures up-front that include services provided, compensation, and the range of fees. If you would like to read the full explanation of this from the Department of Labor, click here.
If you have a relationship with a financial advisor and you are unsure of the premise of that relationship, please give us a call. We are a true independent fiduciary and would be happy to explain in more detail why all of this is happening and why it may be an important event in your financial life.