Recently, a few clients shared their reactions with me about an item in the news: that more financial advisors will soon be required to work in their clients’ best interests. This is called the “Fiduciary Standard.” These clients asked, to paraphrase, “Shouldn’t everyone have a financial advisor who works in their best interest?” Given that we here at Laurel Wealth Planning already operate under the Fiduciary Standard, and that we’ve advocated for this standard across the industry, we agree!
Thirty years ago, as a newly-minted, commission-based advisor, I was deeply disconcerted by the many conflicts of interest that the commission model presented. I quickly left that conflicted role, obtaining advanced education (Master in Business Taxation, CPA, Economics degree) and employment with a CPA firm, so I could offer financial advice on a consultative, unbiased basis.
Additionally, some of our valued team members, Joe Downes (Wealth Manager) and Saul Baumann (Associate Wealth Manager), have both spent time in the “non fiduciary” business models of the industry. This experience strongly motivated them to join a team that puts each client’s interests first.
Background on the new Fiduciary Requirements
The Department of Labor (DOL) just released its final ruling, requiring that more investment professionals work at a “Fiduciary Standard” when they serve clients with retirement accounts. Before this ruling, and currently, some financial advisors can serve clients via a lower “Suitability Standard.” The DOL’s new rule will not be implemented until January, 2018.
This ruling is intended to eliminate the current latitude given to some non-fiduciary advisors who can currently give, “Imprudent and disloyal advice; and steer plans and IRA owners to investments based on their own, rather than their customers’ financial interests; and act on conflicts of interest in ways that would be prohibited if the same persons were fiduciaries.” [Source DOL final ruling.]
Your Needs First
As you know, we always put your needs first when working with you and we’ve held ourselves to the highest fiduciary standards since the inception of Laurel Wealth Planning. This ruling changes nothing about how we operate. If there are people in your life who may not be receiving this high standard and don’t want to wait for 2018, we’d be happy to talk to them.
Please do let us know your questions and comments. We always appreciate hearing from you.
Laura, the founder of LWP, is a Senior Wealth Manager, Chief Investment Officer and Shareholder. She has a master’s degree in tax and is an excellent listener. While she is a sophisticated financial planner with experience in complex issues, her priority is ensuring a financial plan works for people.
