There is a great deal of focus and attention on the new Department of Labor proposed fiduciary rule. In our October blog, we explored the differences between suitability and fiduciary standards and why the proposed new DOL fiduciary rule would help to make sure all advisors are held to a higher standard.
The Wall Street Journal recently explored this same topic in depth by studying, through test customers, how financial advisors propose investments to prospective clients. Their article summarizing their study, “We Put Financial Advisers to the Test–and They Failed”, explains the conflicts they experienced. As the article states, “We found that advisers appeared willing to make their clients worse off in order to secure financial gain for themselves.”
Eliminating conflicts of interest in the financial industry is a positive change. At DirectAdvisors we are ERISA fiduciaries to 100% of the retirement plans we service. Making sure advice is always in a client or participant’s best interest should not be the exception, but the normal course of business.