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What is the DOL Fiduciary Rule

| June 22, 2017
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What is the DOL Fiduciary Rule?

In short, the Department of Labor’s (DOL) fiduciary rule “elevate(s) all financial professionals who work with retirement plans or provide retirement planning advice to the level of a fiduciary, bound legally and ethically to meet the standards of that status.” Meaning, advisors must put the best interest of their clients before their own, and disclose all fees & commissions and any conflicts of interest.

If you’re thinking, “gee, I hope my advisor is doing this,” we understand – this rule sounds slightly superfluous. So here’s some background: previously, the suitability standard is what applied to financial advisors. It required that if a recommendation was suitable for an investor, it met the standard. With the new DOL Fiduciary Rule, advisors are legally liable for making sure their recommendations are in the best interest of their clients – not just suitable for them.

What this means for retirement accounts.

The obvious pro is that if there was any doubt your advisor was acting in your best interest before, he or she must do so now. Some critics of the rule claim that this may drive compliance costs up for advisors (think: more paperwork) and therefor drive costs up in the entire industry.

Regardless, you should consult your financial advisor. Ask him or her questions about how this rule change may affect your retirement accounts, and what he or she is doing to remain proactive.

Call Dale at 715-839-1006 if you’d like to schedule an appointment to discuss your retirement accounts!

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