I’ve been fortunate enough to spend 35 years as a financial advisor. Over the years, the industry has evolved from its humble roots in the brokerage and insurance space. Throughout this changing landscape, I’ve been amazed how one simple concept could cause so much controversy; the infamous Fiduciary Rule. The Department of Labor (DOL) introduced the Fiduciary Rule about a year ago, stating that a financial adviser should act in the best interests of their clients when providing investment advice for a fee or other compensation. Sounds quite simply, like the right thing to do however, the ramifications of this statement are far reaching and have turned the industry upside down. The controversy stems from the question, who is considered a fiduciary when providing investment advice to consumers?

Logically, most consumers would assume that anyone providing such advice should be acting in a fiduciary capacity, whereby every decision made is in their best interest. The reality is that some financial advisers have been exempt from the fiduciary standard and held to a much lower “suitability” standard. The proposed Fiduciary Rule would require advisors to act in the best interests of their clients when providing advice on retirement plans or accounts. For decades, the Investment Advisers Act of 1940 has upheld a fiduciary standard for Registered Investment Advisers such as RTD, regardless of the client’s investment objective or account type.

So where does all of this leave the consumer? Probably confused. The Fiduciary Rule was scheduled to go into effect on April 10, 2017 however, the DOL has delayed the implementation by 60 days in order to complete a review of the regulation as ordered by President Trump. There has been significant opposition from the brokerage and insurance community where commissions are earned  from product sales. The rule could eliminate many commission structures, and force these advisors to provide clients with complex disclosure agreements. Regardless of whether the Fiduciary Rule is implemented, our clients can trust that we will always put their interests first. We don’t need a law to understand the importance of that basic tenet.