The Department of Labor (DOL) has put forward a new rule which may drastically change how investments are managed. The Fiduciary Rule requires all advisors and brokers to act as fiduciaries when providing investment advice on IRAs or qualified retirement plans like 401ks; before this regulation, there was no such standard for those working in the industry – only registered professionals had surpassed them with their higher standards.
Under the DOL’s rule, when a financial professional provides investment advice or recommendations to an IRA owner and, in doing so, receives compensation from that client’s retirement account management company (e.g., 401k plan), they must put their best interest ahead of any other loyalty concerns.
The standard is called “fiduciary” because it requires people who have been given responsibility for managing other individuals’ assets—such as lawyers and certified public accounting firms under federal law–to act solely according to those duties without being influenced by anything else, including personal beliefs about what may be good timing on investments instead!
The suitability standard was previously required of those “advisors” working for brokerage firms, banks, and insurance companies, and many independent advisors registered with the SEC. Under this requirement, there can be no guarantee that an investment will meet a client’s needs or objectives – only if it is ‘suitable,’ which means they have met your requirements but may not necessarily be in their investor’s best interest at all times!
Thanks again for reading this email! We are very sorry that the DOL Fiduciary Rule only applies to retirement accounts. This means it does not apply to other investment advisory services, such as mutual funds or individual stocks and bonds, which our clients can invest in with full knowledge of all conflicts of interest.
We believe it is essential for advisors like us to be transparent about our financial interests and recommend investments aligned with your goals. The DOL Fiduciary Rule will make sure you know what we’re telling you matters, not just because of how much profit there might potentially be at stake but also if an investment doesn’t align well, things can get legally complicated quickly – please consult a lawyer before making any decisions!
While this new reporting requirement may be inconvenient, we will ensure that it does not affect our ability to provide the best service for you or anyone else who invests in our services. We await your immediate response about any questions regarding these changes! We appreciate your confidence and faith in us.
