Department of Labor Announces New Fiduciary Duty Rules for Advisors

Matt LaRocca |

Recently, the Department of Labor passed new rules that hold certain types of financial advisors to a higher legal standard with respect to advice provided for retirement plans and investors. The DOL fact sheet can be viewed here.

Unlike some brokers and other financial advisors in the industry, RDM Capital is regulated as a Registered Investment Advisor. We are not brokers and do not receive compensation through commissions from any third party source. As a fee-only RIA, we have always been and continue to be held to a fiduciary duty that requires us to always make investment decisions that are solely in our clients’ best interests. This is a higher standard than the “suitability” standard that brokers must adhere to, which only requires that an advisor’s investment recommendations are suitable for the investor. Further, the absence of third party compensation reduces conflicts of interest in the advice that we provide our clients.

The new DOL regulations aim to raise the legal standard of advice with respect to retirement investment decisions made by financial advisors that have not otherwise been held to a fiduciary duty standard. The new regulations were met with loud opposition by many in the financial advisory business, due to the potential for higher compliance costs and regulatory burden on firms that employ advisors that work within the traditional brokerage model. While the DOL regulations are not as stringent as some brokers feared, we believe that investors are best served by receiving retirement advice from a fiduciary, not an advisor operating under a suitability standard only. At RDM Capital, we will continue to make every decision with our clients’ best interests in mind and will not allow third party compensation or conflicts of interest to influence our advice.