You should be clear about whether the person giving you financial advice is putting your best interest first
For years I have bemoaned the fact that many financial professionals were not always required to act in the best interest of their clients, i.e., they were not required to adhere to the fiduciary standard of care.Instead, brokers and insurance reps who sold securities products were held to a lower standard of care called “suitability,” which meant that what they recommended had to clear the low bar of what is suitable, though not necessarily in your best interest.
The process started in 2010, when government officials began studying the fiduciary issue. The DOL and Securities and Exchange Commission pursued fiduciary concurrently, which led to different outcomes. It established a higher standard of conduct for investment professionals “when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities, including recommendations of types of accounts.”
Within hours of the DOL’s new rule announcement, Wayne Chopus, President and CEO of the Insured Retirement Institute, an insurance industry lobbying group chimed in.
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