A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties. Typically, someone with a fiduciary responsibility will prudently take care of money or other assets for another person. Fiduciary law can apply to financial advisors, lawyers, and other situations that require trust, good faith, and honesty.

It’s no secret that stockbrokers, and financial advisors who are not fiduciaries, can get kickbacks or other special incentives, like trips to Hawaii, to promote certain products like mutual funds.

But, when you are working with a financial advisor who is a fiduciary, you don’t have to wonder if they are recommending a certain investment because they are trying to win a trip to Hawaii, or because it is really in your best interest.

That’s because their fiduciary obligation requires them to always place your interests ahead of theirs.

This is a big reason why the Obama Administration pushed to implement the Fiduciary Rule. However, in February of 2017, President Trump signed an executive order directing the Department of Labor to review and potentially rescind the fiduciary rule that requires financial advisors to act in the best interests of their clients.

Then, in June of 2018 the Department of Labor’s Fiduciary Rule was officially canceled by the Fifth Circuit Court of Appeals—marking the end of the Fiduciary Rule.

Instead, the Securities and Exchange Commission proposed its “Best Interest Rule” to replace the fiduciary rule for brokers and financial advisors.

According to The Wall Street Journal: “The SEC’s plan to require brokers to act in the best interest of clients is less restrictive than the ‘fiduciary rule’ affecting retirement accounts … The SEC’s rule would not ban any single conflict of interest, such as sales contests that brokers conduct to juice sales of particular products but would generally require brokers to disclose conflicts of interest and try to blunt their impact.2

As a result, financial advisors would now be placed into two categories, those who have a fiduciary relationship with their clients and those who don’t. And, if you are working with a financial advisor who is not a fiduciary, he or she is only obligated to recommend investments that are “suitable” for you.

So, if that advisor has a choice between two similar investments, but one pays a higher commission, the advisor could recommend the one that pays them a higher commission—even if the other investment has lower fees and might be better for you in the long run.

So, how do you know if the financial advisor you are working with is a fiduciary? Simple, just ask them.

The good news is that when you work with an Income Specialist from The Retirement Income Store®, you can rest assured knowing that they are financial advisors who are also fiduciaries—which means they will always place your interests first.

You might be wondering, “How can I find a fiduciary near me?” Well, thanks to David J. Scranton, Founder of The Retirement Income Store, it’s never been easier.

Call (888) 888-4176 or visit The Retirement Income Store and click on the map to find a financial advisor who is not only a fiduciary, but also an Income Specialist.

1. https://www.barrons.com/articles/sec-proposes-its-best-interest-rule-1524091249?mod=article_inline

2.https://www.wsj.com/articles/sec-votes-to-propose-stricter-broker-standards-1524087157