MY TWO CENTS:
noun: a person to whom property or power is entrusted for the benefit of another.
adjective: 1) of or relating to the relation between a fiduciary and his or her principal;
2) of, based on, or in the nature of trust and confidence, as in public affairs.
As you read this week’s iteration of MTC, you’re probably scratching your head thinking, “Why is Scott sharing this obscure definition with me?” Here’s why:
A recent Department of Labor (DOL) ruling that is scheduled start to rollout this April will begin holding anyone providing investment advice on retirement accounts to a fiduciary standard. When you consider the definition of fiduciary listed above, I hope that your next question would be, “Isn’t my financial advisor already acting for my benefit and in my best interest?” That answer SHOULD be an unequivocal “Yes!”
While we feel that the way the DOL is measuring the fiduciary standard is a bit odd, we absolutely agree with the idea of putting our clients’ interests first AT ALL TIMES. Period. End of story!!!
In fact, our entire process of support has been built around the idea that each individual or family that we have the privilege to serve is unique and deserves our best. This means that our planning is done for each of our clients’ goals individually. And when we make investing recommendations for our clients in pursuit of their goals, those recommendations are built on what we believe will best help them get where they want to go. Period. End of story!!!
As has been the case with a number of laws and rulings during the last few years, there is still a bit of ambiguity in the interpretation of the DOL ruling. As clarity comes and we better understand how the DOL’s fiduciary standard will be measured, we’ll be sure to share with you what all of this means in your personal situation.
Until then, please know that we already function in this capacity for our clients and are excited about the standard being raised across the board. Make it a great week!
Scott Cousino, CFP®