If you’ve kept up with financial news at all in the past year or so, you have probably heard the word “fiduciary” floating around. What is a fiduciary? What’s the difference between a fiduciary and a stockbroker? Are the professionals at Irving Advisory Group fiduciaries?
Before we tackle these questions, let’s take a step back and go over a brief summary of what the Department of Labor’s fiduciary rule is and some important dates to know. Then, let’s discuss what this ruling means here at Irving Advisory Group.
A Fiduciary Timeline
The idea of a “fiduciary standard” has been around for a long time, but recently it has been getting a lot of attention because the federal government wanted to step in and protect retirement savers. Way back in 2010, some big shot in the Federal government realized the importance of protecting retirement savers and their accounts (on the heels of the economic collapse we all know and love!). Seven years later, we’re still nailing out the details of what has become known as the “fiduciary rule.” After much back and forth, in March of 2017, the new DOL proposed ruling made its appearance. With that also came the implementation date of June 9, 2017.
The proposed fiduciary ruling may be new, but the idea isn’t. At Irving Advisory Group, we have been working as fiduciaries way before it was mandated.
What is the final ruling?
At the time of writing, the ruling is as follows: “The Department of Labor’s definition of a fiduciary demands that advisors act in the best interests of their clients, and to put their clients' interests above their own,” a definition that comes from Investopedia. But you can tack on all the legal jargon as you want, at our firm it’s all the same. We put our clients’ needs first, as we always have, and will continue to do so. The law may change, but our level of service never will.
In explaining what we do here at Irving Advisory Group, let’s quickly look at the difference between a fiduciary, like we are at our firm, and a stockbroker.
Stockbrokers Versus Fiduciaries
A stockbroker is any person engaged in the business of effecting transactions for the account of others. They may go under different titles, such as wealth managers, wealth advisors, or financial advisors. Regardless of their title, though, stockbrokers are generally not considered to have a fiduciary duty to the client. Instead of being obligated to put their clients’ interests ahead of their own, broker are only expected to deal fairly with their clients and provide suitable options.
What does this all mean for Irving Advisory Group clients?
With the many dates, terms and rulings circling around, you may be wondering how this ruling impacts clients at our firm. Simply put, not much will change. There will be some paperwork on our end, and a thorough examination of all of our recommendations, but we have been serving as fiduciaries for our clients since our inception. When we craft financial plans, we always put your interests above our own and act independently of any institutions or commission structures. Seeking out an investment advisors who will act as your fiduciary can help eliminate many of the problems associated with working with an advisor who is solely concerned with commissions and making sales. We, as fiduciaries, always service our clients first, last, and always.