As many have heard by now, the Department of Labor (DOL) made it clear through its April 6, 2016 ruling that investor interests must come first and their advisors must act in a fiduciary capacity. The goal of the ruling is to protect investors by requiring all who provide retirement investment advice to plans and Individual Retirement Accounts (IRAs) to abide by a “fiduciary standard – placing clients’ best interests before their own profits”.
On February 3, 2017, the new administration issued a memorandum directing the DOL to examine and determine whether the rule adversely affects the ability of Americans to gain access to retirement information and financial advice.
Then in April 2017, the DOL issued a delay in the applicability date of the fiduciary rule making the effective date June 9th.
In May, the DOL announced that the June 9th date would stand after many thinking the rule, despite all of its efforts, would die on the vine. But it didn’t.
So what does this all mean?
For starters, we think it’s important to know that the DOL originally released its fiduciary rule proposal in 2010. It has taken seven years of back and forth battling, fighting, debating and spending to pass a rule that simply stated, is to puts clients’ interests first. Think about this for a second. Client interests come first. That governing rule took seven years to implement! That governing rule should have been standard operating procedures by everyone involved with ultimate responsibility of managing not just assets, but the lives and outcomes of hardworking people and families relying on their resources who entrusted others to look out for them.
We believe the rule a great thing for all investors. While it may not be as strict as we would prefer, it’s a great start. Finally, firms that have resisted will soon be adhering to a higher standard. That’s the good news. The not so good news is that unfortunately, it took a mandate that technically should have been their mode of operandi to begin with.
Firms, like RTD, who have always embraced their fiduciary responsibility, will continue to act in the best interests of their clients. These select firms have always believed in adhering to this higher standard of care and have been doing so by nature. This would include doing everything possible to reduce or eliminate conflicts of interests throughout our existence. Investors are fast becoming increasingly educated and are not just looking for advisers and firms who are fiduciaries; they are now looking for advisors and firms who are fiduciaries by nature. Said another way, we could never imagine performing and advising clients based off of any other standard other than the highest.
There can be only one reason why something so obvious was even a battle to begin with – follow the money trail and you’ll probably find the answer.
Please contact us if you would like to receive a copy of our Fiduciary Oath and/or if you would like to simply continue the conversation with us.