Is Your Financial Advisor a Fiduciary?
There’s a lot riding on the choices you make regarding your financial future. You work with a Financial Advisor because you appreciate the value of experience, training and knowledge. Indeed, your Financial Advisor is positioned to help you every step of the way as you map out a strategy designed to address your unique situation. But, are they a fiduciary?
What is a fiduciary? A fiduciary manages another party's assets and has a legal and ethical obligation to put the other party's interests first. For a Financial Advisor, that means helping a client make decisions in his or her best interest, even if it means reduced compensation – or no compensation – for the advisor. Here’s the important part….not all Financial Professionals are held to a fiduciary standard.
In 2018, the federal government proposed implementing the “Department of Labor Fiduciary Rule” which required Financial Advisors who provide advice regarding retirement plans covered under the Employee Retirement Income Security Act of 1974 (ERISA) to act as fiduciaries, meaning they must put their client’s needs first. The law, however, was officially defeated in March 2018 by a split decision in the Fifth Circuit Court, allowing broker dealers, insurance salespersons and advisors the freedom to offer financial advice and investment options operating under the "suitability standard." This is where they are merely required to ensure an investment is suitable for a client at the time of the investment. With the fiduciary rule, also known as the “Conflict of Interest” rule defeated, investors are not protected from financial advice that may not be in their best interest. We, however, are Investment Advisor Representatives registered with the SEC. We are also associated with the International Association of Registered Financial Consultants and the Master Registered Financial Consultant Certification Board with professional designations that require continued education, professional transparency and ethical behavior towards our client base.
Here’s the good news – We have always been a fiduciary.
Victory Wealth’s core value - Clients first. Being a fiduciary is an ethical and legal obligation that we have always held ourselves to.
Engaging an impartial financial professional to create and implement an investment plan can be the difference between achieving your objectives and falling short of your goals. Make sure your Financial Advisor is a Fiduciary. If you don’t know, ask them! It seems like common sense, but understand the fees on your account. Know what you are paying for. A good advisor will have a customized plan, should be grounded by a solid philosophy and have many years of experience with economic cycles and market volatility.
Midge Suite-Arnold and Cathy Foster offer securities and investment advisory services offered though Osaic Wealth, Inc., member FINRA/SIPC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss.