Our View on DOL Fiduciary Rule Regarding Retirement Investment Advice

BACKSTORY.  In April of this year, the U.S. Department of Labor (DOL) issued a long-awaited regulation that essentially applies a “fiduciary” standard to financial professionals offering advice for retirement plan accounts. The regulation has been discussed and debated (essentially delayed) for six years and has faced fierce opposition from many brokerage industry leaders.

Essentially, investment “brokers” were formerly subject to a “suitability” standard of care in offering services to participants and sponsors of retirement plans, IRAs and other retirement products. The new DOL regulation raises the standard from “do what is suitable” to the higher fiduciary standard of “do what is in the client’s best interest.”

Since the issuance of the regulation in April, it has faced numerous court challenges by brokerage industry leaders that remain pending. In addition, Congress passed legislation attempting to kill the DOL investment advice regulation, which was subsequently vetoed by President Obama. An attempt to override the President’s veto failed.

This issue has even gone prime time, bringing much- needed attention and common understanding to the issue. John Oliver, on his HBO comedy show “Last Week Tonight with John Oliver,” applied his unique satirical skill and humor to address why all financial professionals should be held to the highest standard of care. The issue is increasingly making its way into general-interest media, as well.

OUR VIEW.  As registered investment advisors (not brokers), we have embraced and applied the fiduciary standard for many years and continue to do so under the newly issued DOL reg.  We support the intended purpose of the new regulation—that all financial professionals, whether a broker or advisor, put their clients first by serving the client according to what is in the best interest of the client.

We welcome the exposure of this issue to the public and stand prepared to assist plan sponsors and participants with their retirement savings needs, offering advice that continues to be in the best interest of our clients.

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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice.  Please note that individual situations can vary.  Therefore, this information should be relied upon when coordinated with individual professional advice.