Regardless if you are a financial news junkie or simply a 10 o’clock evening news viewer, chances are you’ve heard about the new DOL rule that went into effect June 9th, 2017.
On that date, financial advisors were required to recommend advice that was in your best interest in a fiduciary role. While it may come as a bit of a shock that this wasn’t always the case prior to that point, according to the White House Council of Economic Advisors, $17 billion of lost income occurs every year due to conflicts of interest by investment advisors.* So what does this mean to you and the relationship you have with your financial advisor?
What is the basic idea behind this rule?
The reasoning behind this regulation is to stop financial advisors from recommending products on 401(k) plans, IRAs or other investments for your retirement portfolio that benefits them by earning high commissions and/or fees rather than recommending investments that may be lower priced and in the client’s best interests.
What is a Fiduciary?
In the financial services industry there are two types of advisors. The first group are the financial advisors who work on a suitability standard. Simply put, the suitability standard requires the advisor makes sure that the investment they suggest for you is suitable based on your unique situation, but does not require the investment to be in your best interest.
Secondly, is the fiduciary standard. The fiduciary standard requires that your advisor put your interests ahead of their own interests, 24 hours a day, seven days a week, 365 days a year. In order for the advisor to act in the capacity of a fiduciary, they truly have to understand everything about your financial life. Their goal is to help you make the best decisions in every area of your financial life. At Modern Wealth Management, we live by the fiduciary standard.
At the end of the day, Modern Wealth Management prides themselves as Fiduciaries to put your best interests at the forefront of any financial plan. You have one life and we want you to be able to live the one best financial life possible. If you have any questions for your advisor regarding the Department of Labor regulations addressed above, please feel free to email your question directly to your advisor, call Modern Wealth Management at 913-393-1000, or schedule a complimentary consultation below.
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The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.
* http://www.cnbc.com/2016/10/13/how-the-new-fiduciary-rule-will-actually-affect-you.html