There’s been a good deal of talk in the industry and in the media regarding the recent Department of Labor Fiduciary Rule for retirement accounts, including individual retirement accounts (IRAs). The final rule was passed earlier this month, and it requires advisors to serve as a fiduciary for clients, which means they’re required to put their clients’ interests first. It seems like common sense, but unfortunately, it’s not a standard to which some in our industry have operated in the past. In fact, advisors who work on commissions advocated strongly against this rule.
What does it mean to be a fiduciary? It means that your advisor has the responsibility to monitor your portfolio on a regular basis, and make recommendations based on what’s right for the client at all times. In absence of this fiduciary responsibility, an advisor would only be required to meet a suitability requirement, meaning that the investment was appropriate at the time it was incorporated into your plan. There’s no incentive or reason for that advisor to ensure that it still makes sense one, five, ten or more years down the road. Krilogy Senior Advisor Pat O’Brien recently wrote a great article explaining this difference.
We at Krilogy applaud the DOL for passing the Fiduciary Rule. Our firm as a whole, and each of our advisors, have always followed fiduciary standards when serving our clients. We believe that it’s the only way to guide you down your path to accomplishment, and quite frankly, it’s just the right thing to do. We’re in this together, and are proud of our dedication to providing you with recommendations that are not dependent on selling you any specific product, or limited in terms of the options we can propose. We sell nothing, and are beholden to no one but you. For too many in the industry, that’s not the case, and we look forward to the shift that will come as a result of this rule.
While this is big news for the financial services industry as a whole, Krilogy also has some exciting news and developments that we’ll be sharing with you very soon. In the meantime, we’ve been expanding our staff, and doing great work in the community which you’ll read about in this newsletter. Stay tuned for more news to come.
Many thanks to you and your family for your trust in the Krilogy team.
President and CEO