By Dana Aspach via Iris.xyz
A friend recently told me that her MBA-degreed 60 year-old-brother, Michael, admitted he didn’t know how his financial advisor Meg, affiliated with one of the country’s top financial firms, made her money.
What?!?!?! Michael, with $3,000,000 in investments, is a pretty savvy fellow. How could he not know how Meg earns her keep? Is she a fee-only advisor that legally must put her client’s interests first, or a commission-based advisor that may at times have a conflict of interest between what will pay her the most and what will be best for Michael?
This topic is germane right now. Earlier this year, the Department of Labor (DOL) announced that the fiduciary rule, which went into effect on June 9, 2017, will phase in through July 1, 2019. This rule mandates that all financial professionals who work with retirement plans or provide advice on retirement accounts act as a fiduciary.
A fiduciary is a person who is legally bound to give advice that is in the best interest of his or her client. The gist of the new ruling is that brokers must put their clients’ interests before their own when handling retirement accounts. (It pains me that this is something that needs to be said, let alone ruled on by the government.)
Click here to read the full story on Iris.xyz.