In 2012, the Institute for the Fiduciary Standard implemented Fiduciary September as a way to recognize the importance of fiduciary duty within the capital markets. The purpose of this month-long recognition was not only to celebrate advisors who hold their business practices to the fiduciary standard, but also to create awareness regarding the magnitude of responsibility all financial advisors have to act in the best interest of their clients when making decisions on their behalf.
At Financial Fiduciaries, we believe that 2016 is a crucial year for us to recognize this important month. We are in a historic time with regards to the Fiduciary Standard. This past April, the DOL issued its final rule regarding the expansion of the definition for the “investment advice fiduciary,” under the Employee Retirement Income Security Act (ERISA) of 1974. The elements of the new ruling include the following:
- Significant expansion of the conditions in which broker-dealers, investment advisers, insurance agents, plan consultants and other intermediaries are treated as fiduciaries to ERISA plans and individual retirement accounts (IRAs) and are not allowed to receive compensation variations based on the investment choices made or recommend proprietary investment products missing an exemption.
- New exemptions, modifications or revocations in the quantity of existing exemptions, addressing those activities.
- Retaining the ERISA distinction between non-fiduciary investment education and fiduciary investment advice.
We look forward to seeing how this new ruling will change the way advisors work with clients to provide the best possible investment advice for their specific circumstances. If you have questions about fiduciary duty and how it might affect your investment planning, we would be more than happy to discuss this with you!