Tom Chancellor
  • Home
  • About
  • Press
  • Blog
  • Video

​

Does Your Financial Advisor Act in Your Best Interest?

12/5/2016

0 Comments

 
Picture
The Department of Labor is introducing an important new rule regarding retirement plan accounts, which will be phased in during 2017 and fully implemented by 2018. Under this new rule, financial professionals who consult retirement savers will be held to a fiduciary standard. In other words, they will have an ethical and legal obligation to always act in a client’s best interest.1 
    
Many financial professionals already abide by a fiduciary standard. Thanks to the new rule, even more will. In fact, the fiduciary standard may soon become the “new normal” in the financial services industry.
 
It has not always been so. Historically, investment professionals have been asked to uphold a suitability standard when making recommendations to their clients. Under the suitability standard, financial products are recommended considering a client’s age, income, net worth, and savings goals. Many in the brokerage industry believe this standard has worked well.1
 
The Department of Labor disagrees. In its view, the suitability standard leaves an open door for conflicts of interest to affect client-advisor relationships. In theory, many investments or products could be found suitable for an investor, and the one most recommended could be the one that results in the largest commission for the financial professional offering the advice.1,2
 
So, which financial services professionals uphold a fiduciary standard and emphasize fee-based or fee-only planning?
  
Registered Investment Advisers (RIAs) work by a fiduciary standard. They are regulated by the Securities and Exchange Commission and/or state securities authorities, and charge their clients fees for most or all of the services they provide. Both individuals and firms can be RIAs.2
 
Certified Financial Planner™ practitioners also uphold a fiduciary standard. These individuals abide by the code of ethics and rules of conduct articulated by the Certified Financial Planner™ Board of Standards in Washington, D.C. They are directed to provide their financial planning services as fiduciaries.3
    
Sometimes, the decades-old compensation structure of the financial services industry can impact even those financial professionals serving as fiduciaries. For example, a CFP® practitioner or an SEC-regulated investment adviser may also sell insurance products that provide commissions, and help clients invest in certain brokerage accounts linked to commissions.1,2,3
 
In short, the financial services industry is not perfect. The new Department of Labor rule demanding a fiduciary standard from the professionals advising retirement accountholders takes a big step toward remedying some of its imperfections.

Tom Chancellor is a Certified Financial Planner Professional helping clients enhance their financial peace of mind. Tom spent 20 years as a marriage and family therapist and now incorporates resources from psychology, communications, and relationship studies in financial planning for people who experience life-changing events. Tom helps his clients and other financial professionals respond to life transitions such as divorce, death of a spouse, retirement, receipt of an inheritance and legal settlements. Contact Tom with questions at tom@teaktreecapital.com.
​
​

Securities offered through Comprehensive Asset Management and Servicing, Inc. (“CAMAS”), 2001 Hwy 46, Ste. 506, Parsippany,  NJ 07054, 1-800-637-3211.  Member FINRA/SIPC. Teak Tree Capital Management, LLC,  is independent of CAMAS.
​
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
 
Citations.
1 - cbsnews.com/news/merrill-lynchs-landmark-move-to-end-broker-commissions/ [10/17/16]
2 - investopedia.com/terms/r/ria.asp [10/25/16]
3 - cfp.net/about-cfp-board/ethics-enforcement [10/25/16]

 

0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Archives

    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016

    Categories

    All

    RSS Feed

We Would Love to Hear From You


Picture

Telephone

817-706-1909

Email

tchancellor@rfgadvisory.com

Securities offered by Registered Representatives of Private Client Services (“PCS”). Member FINRA / SIPC. Advisory services offered by Investment Advisory Representatives of RFG Advisory, a registered investment advisor. Private Client Services, Silver Creek Advisory, and RFG Advisory are unaffiliated entities. Advisory services are only offered to clients or prospective clients where RFG Advisory and its representatives are properly licensed or exempt from licensure. No advisory services may be rendered by RFG Advisory unless a Client agreement is in place. RFG Advisory Part 3, Form CRS, RFG Advisory Form ADV, Part 2A, Investment Advisor Public Disclosure, RFG Advisory Privacy Policy.
​
The Registered Representative(s) of PCS referenced on this website may only conduct securities business in the states in which they are currently registered. For a list of a Registered Representative’s current registered states, please visit FINRA’s BrokerCheck by clicking here. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal. Insurance products and services are offered through a number of insurance providers, such as Private Client Services, LLC (“PCS”) and RFG Solutions LLC, an affiliated company of RFG Advisory.

 Check the background of this firm on FINRA’s BrokerCheck.
  • Home
  • About
  • Press
  • Blog
  • Video