There has been an ongoing debate about whether the Trump administration will repeal the Department of Labor rule implementing a fiduciary standard for all retirement accounts. Whether the new administration repeals the rule, waters it down or delays the start date; some damage has already been done. The Wall Street Journal recently published an article about the increased awareness we are seeing — investors are openly asking for fiduciary advisors.
Gaining awareness of a problem is the first step in trying to correct a problem.
In order for retirement investors to start getting the advice they deserve, they must realize the advice they are getting NOW may not be what is best for them. Discovering this will require the individual retirement investor to actually look at the specific advice being provided by their current investment advisor. And because the way retirement accounts are structured, it could be difficult (for some) to determine what is (or is not) in their best interest due to the complex products in many retirement accounts.
Investors around the country are slowly beginning to wake up to the idea their financial advisor may not be doing what is actually best for them. Individuals have begun trying to understand what the term “fiduciary” actually means, which seems like a small step — but it’s a step which could have serious implications.
Major financial firms have already taken notice of this as some have already made the shift from the suitability requirement to the fiduciary standard.
Although the Department of Labor’s rule may be threatened by the new administration, it seems a shift has already started. Investors like to compare themselves to certain things. Whether it be their portfolio’s return vs. the S&P 500, the Dow Jones Industrial Average or even their best friend’s portfolio, investors are always comparing themselves to something. The level of service — and now whether or not people are getting fiduciary advice — is something investors will start to compare with their peers. This will lead to more investors asking their current advisor if they are a fiduciary or not.
The overall message to advisors AND investors: even if this rule doesn’t go through, the financial industry has already felt some of the ramifications from it.
Here is the link to the Wall Street Journal article: http://www.wsj.com/articles/fiduciary-finally-catches-onjust-as-gop-threatens-retirement-savings-rule-1481625002
Further reading: http://thereformedbroker.com/2016/11/28/i-dare-you/