Department of Labor Fiduciary Standard of Care
In April 2016, the Department of Labor (DOL)* released a new rule which essentially applies a best interest standard, otherwise known as a fiduciary standard, on professionals who provide advice to individual owners and trustees of retirement accounts. All financial professionals providing advice to retirement accounts were to comply with this rule by April 10, 2017.
In February 2017, the Trump Administration asked the DOL to conduct a new review of this rule. On April 4, 2017, the DOL officially delayed the rule’s applicability date by 60 days to June 9, 2017 to allow for a thorough review per the Administration’s request.
There continues to be a lot of attention to this matter and an ongoing debate from both sides of the argument about the rule’s intent and potential impact to investors. As we continue through the rulemaking process and a new Administration’s review, we remain committed to the ongoing delivery of advice and service to our clients.
Regardless of the regulations we operate under, or as those rules dictate, Janney’s commitment to client relationships has always been based on placing thebest interests of our clients above all else. Clients choose to work with us based on the strength of trust they have in our advice and their relationship with their advisor.
Today, our clients experience the freedom of choice in account types and products, have access to advice at any investment level, and choice in how they compensate their advisor for that advice and service. Together, our advisors and clients discuss and agree upon the best path forward for their individual needs and preferences. For many, this is already within a fiduciary relationship. Our Firm and our advisors have provided clients with options for their accounts, including fiduciary accounts, for decades.
Our Position on Fiduciary Care
We believe in and have advocated for a higher standard of care and uniform fiduciary obligation for all advisors. Taking into account varying client needs, we believe a uniform rule based on a “best interests of the customer” standard will empower advisors to provide even more advice to investors and enhance investor protections. Thus, helping to solve the retirement savings crisis instead of making it more difficult for Americans to save.
We believe, however, the most appropriate regulator to oversee a fiduciary standard is the Securities and Exchange Commission (SEC), the industry’s chief regulator. Additionally, we believe a fiduciary standard should apply to all types of accounts, including taxable accounts, and not only qualified, retirement accounts.
It’s important to move a fiduciary standard forward, but it’s more important to get the policy and rules right so investors are protected, continue to have access to financial advice, and while still also retaining the freedom of choice.
Emphasizing the value of advice and the trust between clients and advisors has never been more important, as it should be. We will continue to advocate for a fiduciary standard but one that is taken forward by the most appropriate regulator, the SEC.
We’re ready for any change.
Should the fiduciary rule move forward under the DOL, or the SEC enacts a fiduciary standard, for many clients there will be no change in how they do business with us today. For other clients, we will work with them through any change – as we have for generations – to be sure individual needs are met.
For all of our clients, what will not change is the dedication of our entire Firm and our Financial Advisors to help you achieve your long-term retirement and financial goals. We remain committed to you, above all else.
*- The U.S. Department of Labor (DOL) is responsible for the administration of pensions and retirement plans. They ensure compliance with the Employee Retirement Income Security Act (ERISA), which sets standards for most retirement and health plans in private industry.
Click here to read SIFMA's Statement on the DOL’s Final Fiduciary Rule.
The Securities Industry and Financial Markets Association (SIFMA) is a United States industry trade group representing securities firms, banks, and asset management companies. Learn more about SIFMA here.
Learn SIFMA's opinion on the DOL ruling on their educational website: www.keepretirementopen.com
To learn about the professional background, business practices, and conduct of FINRA member firms or their financial professionals, visit FINRA’s BrokerCheck website: http://brokercheck.finra.org/
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