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RWM Ahead of the Curve: Why the Fiduciary Rule is Important

The Department of Labor (DOL) Fiduciary Rule, expanding the “investment advice fiduciary” definition under the Employee Retirement Income Security Act of 1974 (ERISA), requires that all financial professionals who work with retirement plans or provide retirement planning advice act as a fiduciary, bound legally and ethically to ‘act in the best interest of their clients, and put their clients’ interests above their own.”

It leaves no room for advisors to conceal any potential conflict of interest, and states that all fees and commissions must be clearly disclosed to clients.

Ruggie Wealth Management was well ahead of the curve, choosing to be bound by fiduciary standards to act in our clients’ best interests a long time before the rule change.

Fiduciary is a much higher level of accountability than the suitability standard previously required of financial salespersons, such as brokers, planners and insurance agents, who work with retirement plans and accounts. The suitability responsibility merely meant that an advisor was legally required to make recommendations that were “suitable” for a client’s objective.

It is expected those advisors who work on commission, such as brokers and insurance agents, will be impacted the most.

We applaud the new ruling, and believe it will increase and streamline transparency, and most of all, help to prevent abuses on the part of financial advisors who resort to excessive commissions and investment churning for reasons of compensation.

If you’d like to know more about how working with a fiduciary benefits you, call us at 352.343.2700 to talk with one of our Advisors.

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