A Quick FAQ on the Fiduciary Rule

The Department of Labor’s Fiduciary Rule—which has been delayed until July 1, 2019—is meant to ensure that transparency becomes general principle across the board. It also signals that educated consumers want a more transparent, data-driven process.

Level the Playing Field

The new rule aims to make all advisers play by the same rules, at least for retirement accounts. The new protections seem like common sense business practices:

  • Give practical advice when making investment recommendations
  • Put customers’ interests first when making recommendations
  • Avoid misleading or confusing language about fees, investments, and conflicts of interest
  • Adhere to the best interest standard and exclude financial incentives for advice that is not in the customer’s best interest
  • Charge reasonable compensation for services

A Few Questions Answered

Why did the Labor Department adopt the rule?

To protect people who are saving for retirement from unscrupulous investment advice.

How does the rule make change in the financial services industry?

The new Fiduciary Rule makes best interest advice the law. In many instances, financial advisers must give you a written statement that they are fiduciaries when they offer investment advice. They must disclose any information about conflicts of interest in any payments they get.

Will the rule better protect my retirement savings?

According to the DOL it will. Your adviser must provide impartial investment advice that is in your best interest and he/she cannot accept any payments that would cause conflicts of interest.

Which financial advisers are fiduciaries under the Rule?

Generally under the Rule, a fiduciary is someone, usually a financial adviser, who is paid for giving investment advice, a recommendation about your retirement accounts, your retirement account rollovers, based on your particular needs. To clarify, general investment or financial education is not considered fiduciary advice.

What loopholes are being closed by the Rule?

Prior to the Rule, many advisers received financial incentives for steering customers to products that weren’t necessarily in the customers’ best interest. Now they must be.

Do you have any questions? Speak with an Investor Relations Representative.

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