To serve the needs of our evolving consumers, a more comprehensive fiduciary mindset needs to be adopted in order to survive.
Last week, the SEC issued proposed rules governing broker-dealer and investment advisor conduct. The rules serve as a counterpoint to the fiduciary rules issued by the Department of Labor.
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Some new developments in Washington and recent court rulings have implications for those saving and investing for retirement. Drew Carrington, head of Institutional Defined Contribution at Franklin Templeton Investments, along with Michael Doshier, head of retirement marketing, examine the status of the Retirement Enhancement and Savings Act (RESA) and what it might mean for both plan sponsors and participants.
Why do experts, CEOs, politicians, and other apparently highly capable people make such terrible decisions so often? Is because they’re ill-intentioned? Or because, despite appearances, they’re actually stupid? Nassim Nicholas Taleb, philosopher, businessman, perpetual troublemaker, and author of, among other works, the groundbreaking Fooled by Randomness, says it’s neither.
They call themselves fee-based, dual-registered or hybrid advisors, but I’ll call them “part-time fiduciaries.” Don’t hate me for this, but I recently referred my close friend to one of them. Despite the bombardment of propaganda from fee-only RIAs, these part-time fiduciaries are pretty good.
The US Department of Labor’s (DOL) Fiduciary Rule has been the subject of much debate, and still remains largely in limbo as it works its way through the court system. The rule, which expands the scope of persons deemed to be a fiduciary, was to go into effect in January 2018, but full implementation was delayed.
The Fifth Circuit Court of Appeals’ decision essentially wipes the Fiduciary Rule off the books. But, that doesn’t mean everything returns to the way it was before the Rule.
The CFP Board set out fiduciary duties for all advice. Its statements are clear and strong. This is an important step. But alone, it falls very short. Why?
The CFP Board proposal on fiduciary duties are a good first step towards a fiduciary standard. Yet, they fall well short of basic fiduciary practices and, equally as important, what ordinary investors clearly want from an investment advisor or financial planner. Significant common sense revisions will align the CFP requirements with true fiduciary practices. Alternatively, the Board can realign its promise to the public to fit its current standards. Webinar attendees will learn: