Fiduciary Duty Rule Delayed

The Obama administration passed a rule that required investment advisors to adhere to fiduciary standards.  Simply put, this means recommending investments that are in the client’s best interests.  Previously, advisors merely had to recommend suitable investments.  This often led to them recommend investments that, while suitable, offered the advisor the highest possible commission which was derived from very high customer fees.

This rule was set to go into effect in April 10.  However, President Trump issued an executive memorandum on February 3 that delays implementation of this rule.  The memorandum directs the Department of Labor to delay implementation until June 9 to understand the rule’s impact on investment firms and investors.  Conflict-of-interest disclosures and special rules for selling annuities will be delayed until January 1, 2018.

As in most legislation, there are arguments for and against these rules.  Ignoring the details of these arguments, many reporters conclude that the investment industry is against the Fiduciary Rule and that consumer advocacy groups support it.  For example, AARP Executive Vice President Nancy LeaMond says that “It is time that all Americans can count on retirement investment advice that is in their best interest, not the interest of Wall Street.”  Kevin Keller, who heads the Certified Financial Planner Board (of which Guidepost Financial Planning is a member), says that “Advisers should be required to put their clients’ best interest first.”  You can learn more about this legislation by reading our previous blog posts on New Fiduciary Rule for IRAs, Push to Protect Investors and The Future of Financial Advice.

However this legislation turns out, you can be assured that Guidepost Financial Planning voluntarily adheres to fiduciary standards.  We’re one of the Fee-Only professionals that always put your interests first.  If that kind of trustworthy financial advice sounds good to you, just visit our website or give us a call at 970.419.8212 so that we can set up some time for a no-charge, no-obligation initial meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.