I believe the DOL rule is a seminal event and will significantly improve the investment outcome of individual investors for decades to come. My friend Bob Veres, publisher of Inside Information and longtime industry observer best summed it up:
“But overall, the new rule fundamentally, and with pretty much zero exception, requires the broker or independent BD rep to act as a fiduciary, and it brings a lot of people into the principles-based universe, which is alien territory for the brokerage firms…My take is that the DOL was a bit sly about its concessions, making it harder for the wirehouse arguments to prevail in court should there be (as I think there WILL be) a legal challenge to these provisions.
I said it’s a milestone for the planning profession, a stake in the ground further than anyone has gone before in the fiduciary requirement space.”
Finally, as legislators, businesses and the courts go about interpreting and implementing these 1,000+ pages, individual investors might happily ignore the activity by simply having their advisor sign the Committee for the Fiduciary Standard’s mom-and-pop fiduciary oath. The simple commitment states:
I believe in placing your best interests first. Therefore, I am proud to commit to the following five principles:
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I will always put your best interests first.
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I will act with prudence; that is, with the skill, care, diligence and good judgment of a professional.
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I will not mislead you, and I will provide conspicuous, full and fair disclosure of all important facts.
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I will avoid conflicts of interest.
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I will fully disclose and fairly manage, in your favor, any unavoidable conflicts.
With that signed and in hand, you will at least know that, for you, the relationship, including non-IRA accounts, is structured so that YOUR interest comes first.
If you would like a copy please drop me a note at [email protected].
Harold Evensky, CFP, is the chairman of Evensky & Katz/Foldes Financial Wealth Management and a professor of practice in the Department of Personal Financial Planning at Texas Tech University.