Article About US Department of Labor Ruling Regarding Fiduciary Standards
While working for a wealth management firm based in London, I wrote a handful of blog articles about various regulatory topics concerning individual and institutional investors. One of the article was about the US Department of Labor Ruling regarding fiduciary standards that financial advisers cannot act against the best interest of their clients.
Proposed Department of Labor Rule Mandates Financial Advisers to Acts in Your Best Interest
Back in June 2016, when John Oliver talked about the shabby practices going on in the financial planning industry in the United States, it was funny and not funny at the same time. For most of the viewers, it was an eye opener, and with a pinch of humour, John made a great show out of the hard facts.
…. The Department of Labor rule has embedded certain disclosure requirements for financial advisers, which means they have to tell you exactly how their background, qualifications, and prior experience would help you.
After April 2017, your financial adviser dealing with your retirement savings will have to let you sign a Best Interest Contract Exemption (BICE). According to the BICE, your financial adviser will be legally bound to disclose that they are going to act in your best interest.
If you later find out that your financial adviser did not act in your best interest, you will have the legal grounds to sue them for breach of contract and get paid any lost profits!
Moreover, they need to disclose and justify the actual fees they are charging based on the advice they are about to give you. Also, if there is any conflict of interest, your financial advisers will be bound by the BICE to disclose and explain those to you.
You can read the full article here.