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DOL Issues Final Fiduciary Rule

This week the Department of Labor (DOL) released its final, long-awaited, fiduciary rule meant to protect investors saving for retirement from conflicted financial advice.

At the highest level the rule requires investment advisers who receive compensation for investment recommendations to a retirement plan participant or Individual Retirement Account (IRA) owner to put their client’s best interest first (Ebling, 2016).  

Fiduciary standard, in its simplest form, means doing what is best for the client. Many advisors are currently held to the lesser suitability standard which allows for product recommendations that may only be satisfactory for their clients.  That’s right, believe it or not, there are advisors out there that up until now, didn’t have to do what was in their client’s best interest.  And in some cases they may still not have to. 

While the DOL rule is a step in the right direction, it falls short in that it focuses primarily on “retirement accounts” such as 401(k)s, 403(b)s and IRAs and ignores other account types and other areas of financial planning where folks may still be left questioning whether they’re receiving the “best advice” or only “suitable advice”

Clients of Thrive Wealth Management can take a big sigh of relief knowing that we have always been held to a fiduciary standard – by choice – and it applies to all aspects of our work with clients, not just retirement accounts.

Nearly two years to the day, April 11, 2014, we wrote a blog on why we operate under the higher fiduciary standard.  In honor of that anniversary and the release of the DOL rule this week, here is a link to the blog, Fiduciary Difference: Why It Matters to You

You may hear a lot about the DOL’s Fiduciary Rule in the coming weeks and as enforcement takes hold toward the end of 2016.  Please call or email with any questions and we’ll help you sort through the noise.

Ebeling, Ashlea. "DOL Issues Final Fiduciary Rule, Does It Fall Short?"Forbes. Forbes Magazine, 7 Apr. 2016. Web. 08 Apr. 2016.