The DOL Fiduciary Rule: What does it mean for you?


Some of you have probably heard of the Department of Labor’s (DOL) Fiduciary Rule. What is it? What does it mean?

A fiduciary is any investment professional who is required by law and practice to act solely in the interests of and with undivided loyalty to their clients.

Effective June 9th, the DOL fiduciary rule will require investment professionals that give you advice on retirement plans to act in your best interest.

While it is a start in the right direction, is does not go far enough in my opinion, plus it is too confusing. The ruling is only for retirement accounts and does not cover non-retirement accounts.

For example if you are working with an advisor who was not a fiduciary before June 9th, more on that in a minute, they will have to act as a fiduciary on your retirement accounts only, the advice they give you on non-retirement accounts only has to be what is “suitable” for you.

Makes sense? I told you it was confusing.

I was recently asked to contribute to an article for The Simple Dollar on this topic. The article was well written by Holly Johnson. She does a great a job explaining what the new fiduciary rule means to you the investor and helps clarify what were just discussing.

So what is Focus Planning Group?

Focus Planning Group is a Registered Investment Advisory firm and we are obligated to a Fiduciary standard. So simply put, if you are a client of Focus Planning Group you are already getting advice based on what is in “your” best interest on all of your investment accounts and financial planning topics!

Unfortunately, some investors work with advisors who are not acting as fiduciaries and they are only required to receive advice that is “suitable for them”.

So are advisors no longer able to charge me commissions?  Yes, advisors will still be able to charge commissions when managing your retirement accounts.  In order to do so however, you will need to be provided with a disclosure agreement, called a Best Interest Contract Exempemtion (BICE). Essentially this contract disclosure will lay out any conflict of interests that may not be in your best interest.

Michael Kitces and Industry leading resource for the financial planning community produced a great graphic that shows the process financial advisor’s will have to follow under the new rule;

If you are not a client of Focus Planning Group. I have two questions for you. First, what are you waiting for :), and second, is your investment advisor a fiduciary on all of your accounts?

We are here to help, click here to schedule a free consultation.

To take it a step further, I have completed a specialized program on investment fiduciary standards of care and passed a comprehensive exam to earn the Accredited Investment Fiduciary designation (AIF®) from Fi360.

Joe Carbone

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About the Author: Joseph Carbone, Jr.

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Joseph A. Carbone, Jr., is a wealth advisor and partner of Focus Planning Group. Joseph is an accomplished wealth advisor with extensive experience in portfolio management/research, financial planning, employee benefits, client relationship management, and insurance design. Joseph holds a bachelor’s degree in finance from Dowling College and obtained the Certified Financial Planner™, Accredited Investment Fiduciary®, and Accredited Asset Management Specialist℠ Designations.
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