By Kelley Caponigro
Assistant to the Chairman & CEO
While many investors may not be aware of the Department of Labors (DOL) six-year battle to establish a fiduciary standard for anyone providing investment advice on retirement accounts, they are surely aware that President Donald Trump has issued a memorandum aimed at delaying these efforts. On Friday, February 3, 2017, the President announced an executive order to halt the implementation of the DOL fiduciary rule, which was set to take effect on April 10.
Unfortunately for many investors, this news means the responsibility of finding a fiduciary rests on their shoulders. Few investors recognize the difference between the fiduciary standard and the suitability standard. Under the law, fiduciaries loyalty is to their client. They are required to always put their clients best interest first and fully disclose in writing any potential conflicts. On the other hand, the suitability standard applies to brokers whose loyalty, by law, is to their Registered Investment Advisory firm, not to their client.
We would like to remind our clients that this ruling does not impact them, because clients of R.W. Rogé & Company, Inc. are already working with a fiduciary. For over 30 years we have been a fiduciary, which means we always have, and always will, act in the best interest of our clients.
Although the media frequently tries to educate investors, the information is too often ignored or not completely understood. Unfortunately, what many investors continue to believe is that client loyalty is paramount in all their financial relationships. In reality, most advisors are not required to place client interest first or avoid conflicts of interest. If something goes wrong it’s the client’s loss, and the only recourse they have is arbitration; that needs to change.
To help investors understand the meaning of the word “Fiduciary” and the importance of working with one, the National Association of Personal Financial Advisors (NAPFA) put together an infographic titled, “Fiduciary 101: What Consumers Need to Know to Protect Themselves.”
Furthermore, on our Web site, and through The Committee for the Fiduciary Standard, investors can find a Fiduciary Promise, and Fiduciary Attestation Form. These are simple statements of responsibilities that everyone can understand, and no fiduciary advisor can possibly object to. These oaths can assist individual investors in gaining control of their own relationship. Investors should bring the Fiduciary Attestation Form with them when interviewing advisors, and if the advisor cannot or will not sign it – this will indicate that they are not a fiduciary. It’s a simple step investors can take to protect themselves and their money.
As fiduciaries, our hope is that information like NAPFA’s infographic and the ongoing efforts of the Committee for the Fiduciary Standard, will assist investors in making educated decisions when it comes to their money.
R.W. Rogé & Company, Inc. helps clients plan, achieve and live the life they want. To learn more about how we do this, click here. To discuss your financial future with a knowledgeable Senior Wealth Advisor, contact us at 631.218.0077 or at firstname.lastname@example.org.