Fiduciary Rules - It's About Time, But Are Your Assets Covered?

Should all investors have transparency into potential Wall Street conflicts and easy access to information about all the fees and incentives that might drive investment recommendations?

Most people I know would answer “yes”, but if you’ve listened to the past year of protests from the investment industry lobby about proposed Department of Labor (DOL) Fiduciary Rules, you might think some in the industry disagree.

The DOL’s Fiduciary Rules are now finalized and should help bring increased transparency to why an investment product is being recommended or sold to retirement plans, but many types of investment relationships might still be opaquely structured as to the degree of conflicts and commissions that might drive investment advice.

Over my 25+ years in the industry, I have seen many different ways relationships are structured and products priced and pitched. I understand what drives profits and incents sales behavior inside investment firms and it’s long overdue for all of this to be more transparent to investors.

Will the new DOL Fiduciary Rule make it easier for retirement account investors to have access to this information?

Probably. (Some commentators believe that Wall Street lobbyists were successful in watering down the final rules too much).

Will the Fiduciary Rule change how products are marketed and sold to taxable personal investment accounts, family trusts, foundations and endowments?


Isn’t it time that all investors be given greater transparency and put in a better position to understand how and when conflicts might be impacting their investments?

A large investment custodian reported this week that, according to a recent survey of its registered investment advisor clients, 73% of advisors feel that their businesses will be negatively impacted by the new DOL fiduciary rules.


Fiduciary standards might put short-term pressure on some Wall Street business models, but shouldn’t transparency increase trust and help us form more lasting partnerships with clients?

Over the long term, won’t relationships built on openness and trust benefit everyone?