In 2016, the U.S. Department of Labor announced new regulations implementing a fiduciary standard for retirement accounts and other qualified accounts such as IRAs. By law, a fiduciary acts in the client’s best interest. An advisor or broker would have to reveal to the client how and why they are not acting in the investor’s best interest if they are not doing so.
Seems reasonable, right?
In March 2017, some of the major firms, such as J.P. Morgan, started to comply with this fiduciary rule. They sent letters to their clients stating “your financial advisor will no longer be able to provide investment guidance,” (according to the letter forwarded to me).
This fiduciary rule is scheduled to go into effect April 10, 2017, unless it is repealed or pushed to a later date. At the moment, the rule is being reviewed.
But wait, it gets better.
The letter also states, “We will notify you in the event these regulations are not implemented as currently planned, as we may not proceed with this transition.”
So the question is, why would these institutions not take fiduciary responsibility of their customers? I’ll let you draw your own conclusions.
When people entrust someone with managing something as important as their money, I have always believed that someone should act as a fiduciary. I myself have always worked as a fiduciary for my clients.
Tony Robbins recently came out with a new book highlighting a loophole on how financial advisors present themselves as fiduciaries but do not act as a fiduciary 100% of the time. Tony Robbins explains how dually registered financial advisors can switch hats at any time. When working with a dually registered financial advisor, it is nearly impossible to know when the financial advisor is working in your best interest.
If you know anyone who would like to learn more about working with a financial advisor who works as a fiduciary a 100% of the time, I would love to start the discussion.