DOL Fiduciary Rule: Letter from the President

DOL Fiduciary Rule Announced

Do you know if your investment advisor follows the Fiduciary standard or the Suitability standard? As an investor you should be aware of the difference. If you don’t, the U.S Department of Labor is going to make sure you do. On April 6, 2016, the Department issued its final Fiduciary rule which will take effect January 1, 2018. However, it will take effect in stages because some of the regulations still have to be worked out. As you can imagine, many financial organizations are in opposition.

What is the DOL Fiduciary Rule?

The Fiduciary Rule requires your investment advisor to act in your “best interest” when providing investment advice when rolling over your retirement plan, such as a 401(k) or 403(b) plan, into an IRA. Many advisors, however, use the Suitability Standard rather than the Fiduciary Rule.

How is the DOL Fiduciary Rule Different Than The Suitability Standard?

What is the difference between the two standards? Registered Investment Advisory Firms (RIA) have used the Fiduciary standard for many years. RIA firms are required to act in the best interest of the client at all times. The Suitability standard requires that an investment is suitable for the client/investor, but does not insure that there is not a conflict of interest.

In 1988, OMC Financial Services Ltd, was registered as an Investment Advisory Firm (RIA) and has been acting under the Fiduciary Rule. We are proud of our decision to become an RIA, even though at the time, (read Our Story) Registered Investor Advisors were not as popular as they are today. If you are not sure about whether your advisor is a Fiduciary and want to learn more about how this new regulation may affect you, let's talk.