Yes, we’re a fiduciary – What that means for you
Breaking down recent updates to the fiduciary rule.
Article published: July 02, 2024
In this article:
- A fiduciary is legally required to put your interests first.
- The Department of Labor recently expanded regulations requiring investment advice on retirement assets to be in your best interests.
- ѨƵ has always been a fiduciary and nothing will change going forward.
It might be the hot topic at this year’s July Fourth barbeque (at least if your friends are as boring as ours): Is your advisor a fiduciary?
It’s an impressive-sounding word, but a “fiduciary” is just someone legally required to act in your best interests, and they pop up in a variety of circumstances. For example, if you’ve given someone power of attorney over your finances, that person is required to act as a fiduciary. An estate executor is required to act as a fiduciary for the beneficiaries. Attorneys, trustees and guardians are fiduciaries. Et cetera.
Fiduciaries take center stage
So why are fiduciaries in the news all of a sudden?
The Department of Labor has tried for years to implement standards that protect retirement investors, including requiring investment advice providers to act as fiduciaries – in other words, to give advice that’s in your best interests, not theirs.
Their efforts came to fruition in April 2024, when the DOL expanded a regulation popularly known as “the fiduciary rule” requiring a fiduciary standard of care for investment advice on retirement assets. The update is slated to go into effect late September 2024.
What does “best interests” mean? Here’s one example of behavior the regulation was designed to protect against: putting a client in proprietary investments simply for the purpose of collecting an unreasonable fee.
In barbeque-friendly terms: When you place your trust in a professional who’s helping you decide what to do with all your retirement investments, they should tell you what’s best for you, not manipulate the situation to line their own pockets.
Our relationship is sacred
ѨƵ has always acted as a fiduciary when it comes to investment advice, and nothing will change going forward. While there are legal challenges to the new regulation working their way through the courts, and outstanding questions about how it will be applied, you can rest assured that the investment advice we give is always in your best interests. It’s not dependent on the new regulation or what goals you’re investing for.
The word “fiduciary” comes from the Latin for “trust.” The trust you’ve placed in us is sacred, and we’ll never take it for granted.
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